EXCHANGE 


EXCHANGE 
APR  14  t9 


THE  BUREAU  OF  SUPPLIES 


OF    THE 


DEPARTMENT  OF  WATER  SUPPLY 
GAS  AND  ELECTRICITY 


NEW  YORK  CITY 


By  ELIHU  CUNYNGHAM  CHURCH 


A  Dissertation  submitted  in  partial  fulfilment 

of   the   requirements   for   the    Degree 

of  Doctor  of  Philosophy  in  the 

Faculty   of  Pure   Science, 

Columbia  University 


NOVEMBER,    1913 


THE   BUREAU   OF   SUPPLIES 


TABLE  OF  CONTENTS 


CHAPTER  I. 
PLAN  AND  SCOPE. 

The  work  of  the  Bureau  of  Supplies  and  its  relation  to  the  rest  of  the 

organization    7 

CHAPTER  II. 
ORGANIZATION  AND  ADMINISTRATION. 

The  analysis  of  the  work  into  its  separate  functions,  and  the  develop- 
ment of  a  system  of  procedure  to  carry  it  into  effect .  21 

CHAPTER  III. 
PURCHASING. 

Details  concerning  the  preparation  of  contracts  for  work  or  materials, 
and  the  Rules  for  purchasing  supplies  in  order  to  obtain  the  right 
materials  in  proper  quantities  at  the  lowest  price 31 

CHAPTER  IV. 

INSPECTION. 
The  inspection  of  Supplies 58 

CHAPTER  V. 
STORAGE  AND  ISSUE. 

Fixing  Stock  Limits — Care  of  Supplies — Equipment  of  Storerooms — 
Rules  for  Storekeepers — Issues — Loans  and  Transfers  of  Supplies 
—Subsidiary  Stores 63 

CHAPTER  VI. 
RECORDS  AND  ACCOUNTS. 

Information  required  for  proper  accounting  control — The  collection  of 

data  and  the  preparation  of  charts  and  diagrams 91 

5 

282323 


IN 
PURCHASING 


By  Centralization  of  buying. 

By  Using  standard  forms. 

By  Preparing  new   specifications. 

By  Standardizing   requirements. 

By  Purchasing  standard  materials. 

By  Obtaining    large    competition. 

By  Buying  large  quantities  at  one  time. 

By  Receiving    bids  on   different 

classifications    separately. 

By  Reducing   costs     of  delivery. 

By  Promptness  in  awarding  contracts. 

By  Anew  Follow -up -system  insuring 

prompt   delivery. 

By  Quick  payment  of   bills. 


By 


By 


Systematizing     the  work. 
Immediate   inspection  after  goods 

are  delivered. 

Reporting  results  of  inspections  at  once. 
Sending  out  rejection  notices  promptjy. 
following- up  replacements. 


Building  and  equipping  storehouses 
Introducing  a  storekeeping  system. 
Taking  the  first  inventory  ever  taken 
of  the  supplies  of  the  department 
Caring  for  supplies  properly. 
Issuing  supplies  only  on  requisition 
Efficient  use  of  storage  space. 
Introducing  effective    records 


By     Concentration  of  office  personnel 
By     Assigning  definite  duties  to  each 

employee. 
By     Training  the  men  in  work  thereby 

increasing  their  efficiency- 
By     Pooling"  the  services  of  the  clerks 

stenographers  and  messengers. 
By    Organizing  the  work  according  to 

functions. 
By     Training  up"Under- study's"  thus 

eliminating  the"lndispensableman': 


CHAPTER    I. 


SCOPE  AND  DUTIES 

The  work  of  the  Bureau  of  Supplies  and  its  relation  to  the  rest 

of  the  organization. 


When  first  formed,  the  Supply  Bureau  of  the  Department  of  Water 
Supply,  Gas  and  Electricity  was  really  a  mere  purchasing  division  doing  a 
sort  of  commission  house  business,  with  no  voice  concerning  the  maintenance 
of  stock,  the  quantity  or  quality  of  supplies  bought,  their  inspection,  storage, 
issue  or  accounting. 

Realizing  that  this  was  wrong  because  it  violated  many  fundamental 
rules  of  business  management,  an  endeavor  has  been  made  to  formulate  the 
basic  principles  involved  and  then  proceed  accordingly.  It  is  particularly 
necessary  to  consider  these  matters  now  that  there  is  so  much  loose  talk  in 
favor  of  a  central  purchasing  agency  for  the  entire  city. 

First,  it  is  essential  to  fix  and  determine  the  scope  and  duties  of  the 
Supply  Bureau  and  its  relation  to  the  rest  of  the  Department,  that  friction 
and  conflicts  of  authority  be  prevented  and  that  the  work  of  the  Department 
as  a  whole  be  done  in  an  orderly  and  proper  manner  by  those  best  capable 
of  handling  it.  For  instance,  it  should  be  settled  where  the  functions  of  the 
Bureau  using  the  supplies  should  best  end  and  those  of  the  Bureau  doing  the 
purchasing  begin.  To  carry  the  inquiry  further — who  under  varying  condi- 
tions should  originate  requisitions  for  supplies  and  who  should  be  permitted 
to  amend  or  veto  such  requisitions?  Previously,  the  other  bureaus  using 
supplies  arbitrarily  fixed  their  own  stock  limits,  specified  what  they  wanted, 
and  then  when  the  goods  were  delivered  to  them  direct  by  the  dealer  who  got 
the  order,  they  often  inspected  them  and  assumed  control  over  them  till  used. 

It  is  assumed  that  the  Department  has  or  should  have  a  definite  program 
regarding  all  new  work,  improvements,  standards  of  maintenance,  and  stand- 
ards of  operation,  which  will  absolutely  govern  all  its  actions. 

The  establishment  of  such  a  program  is  a  "  staff  "  problem  that  should 
be  developed  and  formulated  by  experts.  It  is  based  on  the  conditions  to 
-be  met,  the  work  to  be  done,  and  the  funds  available;  and,  having  been 


adopted,  it  .shoa"!  .^hape  the  activities  of  the  Department  for  years  to  come. 
An  absolute  change  in  expected  conditions,  or  unforeseen  emergencies,  are 
the  only  things  that  should  effect  any  alteration  in  such  a  prearranged  plan, 
for  a  carefully  considered  policy  of  this  sort  gives  stability  to  a  department 
and  enables  all  work  undertaken  in  accordance  with  its  terms  to  be  done 
under  the  most  favorable  conditions. 

Such  foresightedness  on  the  part  of  all  would  lead  to  co-operation  and 
team  play  between  the  different  departments,  and  do  away  with  present 
conditions  under  which  one  branch  of  the  City's  government  puts  down  a 
pavement  and  another  straight  away  comes  along  and  rips  it  up  to  build  a 
>cwer  or  lay  a  water  pipe. 

The  preparation  of  the  contracts  necessary  to  carry  out  this  "  policy," 
and  the  purchase  of  the  required  supplies  are  "  line  "  duties.  The  scope  of 
these  duties  is  fixed  by  the  "  staff  "  policy,  for  no  official  would  prepare  a 
contract  for  which  there  were  no  funds  provided,  and  no  one  would  be  per- 
mitted to  veto  a  requisition  for  supplies  when  it  was  understood  that  it  had 
been  prepared  in  strict  accordance  with  established  standards  and  was  for 
quantities  which  long  study  had  shown  to  be  absolutely  necessary. 

The  sum  total  of  Supply  Bureau  efficiency  is  ordinarily  assumed  to  have 
been  secured  when 

1.  The  Bureau  itself  is  run  economically. 

2.  The  most  reasonable  prices  are  obtained  for  all  articles  pur- 

chased. 

3.  The  articles  called  for  and  paid  for  are  the  ones  delivered. 

All  these  conditions  may  obtain  and  yet  the  service  be  poor,  and  the 
annual  supply  bills  exorbitant  unless  the  Bureau  of  Supplies  sees  that : 

1.  The  supplies  ordered  and  bought  are  really  necessary. 

2.  The  supplies  specified  and  bought  are  those  best  suited  to  the 

use  to  which  they  are  to  be  put. 

3.  The  precise  quantity  needed  is  ordered. 

4.  Purchases  are  made  in  accordance  with  a  definite  plan  and 

under  most  favorable  market  conditions. 

5.  The  amount  of  money  invested  in  supplies  is  kept  at  a  mini- 

mum. 
0.     All  supplies  are  properly  stored  and  issued. 

7.  Supplies  are  only  put  to  the  use  intended. 

8.  Supplies  are  used  efficiently  and  economically. 

9.  Supplies  are  kept  in  service  till  they  are  worn  out,  or  changed 

conditions  require  the  substitution  of  a  more  efficient  or 
economical  article. 

10.  All  burdensome  and  foolish  restrictions  and  conditions  are 
removed  from  the  bidding  requirements  and  the  speci- 
fications. 

8 


1.  All  supplies  ordered  and  bought  should  be  really  necessary. 

There  may  be  a  great  many  reasons  why  proposed  expenditure  is  not 
necessary.  Perhaps  there  is  a  great  surplus  of  identical  stock  in  some  store- 
room which  is  available,  yet  not  used  because  there  is  no  inventory  to  show 
its  existence,  or  no  system  of  stores  control  to  ascertain  the  fact  before  going 
into  the  market  for  more. 

It  is  for  this  reason  that  the  Bureau  of  Supplies  should  have  charge  of 
all  goods  in  storage,  that  it  should  be  responsible  for  the  inventory  and  that 
it  should  maintain  a  system  of  stores  control. 

2.  All  supplies  specified  and  bought  should  be  those  best  suited  to  the 

use  to  which  they  are  to  be  put. 

It  frequently  happens  that  large  sums  are  wasted  by  calling  for  mate- 
rials far  too  expensive  and  of  too  high  a  grade  for  the  purpose  intended. 
Again,  it  sometimes  happens  that  poor  material  is  bought  because  it  is  cheap, 
whereas  a  better  and  more  costly  article  would  have  rendered  proportion- 
ately far  more  service. 

To  obviate  this,  the  Bureau  of  Supplies  has  set  up  standards  and 
written  specifications  so  that  the  most  suitable  supplies  may  be  bought  and 
the  same  article  used  for  the  same  purpose  throughout  the  entire  Department. 

3.  The  precise  quantity  needed  should  be  ordered. 

When  a  man  leads  a  hand-to-mouth  existence,  continually  ordering  small 
quantities  of  material,  he  puts  the  purchasing  division  to  a  lot  of  expense,  as 
it  costs  nearly  as  much  to  handle  a  small  order  as  a  large  one.  The  cost  of 
delivery  is  away  out  of  proportion  to  the  size  of  the  shipment  and  the  neces- 
sity for  inspecting  each  lot  increases  inspection  costs. 

On  the  other  hand,  when  told  to  do  a  piece  of  work  most  men  "  get  on 
the  safe  side  "  and  order  far  more  material  than  close  figuring  would  show 
to  be  necessary.  This  is  particularly  true  where  the  machinery  of  purchas- 
ing is  cumbersome.  A  man  hates  the  bother  of  making  out  another  order  for 
additional  stock.  If  more  material  has  to  be  purdhased  and  there  is  much 
red  tape  he  may  have  to  wait  a  long  time,  and  the  job  will  'be  delayed. 

Quantities  should  be  checked  and  men  held  responsible  for  extravagant 
requisitions.  Before  the  Bureau  of  Supplies  was  created  it  had  often  hap- 
pened that  great  over  stocks  were  purchased  because  the  individual  ordering 
did  not  understand  conditions.  Interest  on  investment,  depreciation  and 
other  losses  made  this  an  expensive  way  to  do  business.* 

4.  Purchases  should  be  made  in  accordance  with  a  definite  plan  and 

under  most  favorable  market  conditions. 

It  frequently  happens  that  a  half  dozen  requisitions  to  purchase  some 
standard  material  are  sent  in  one  at  a  time  during  the  course  of  the  year  as 

*  One  instance  recently  came  to  light  where  a  sufficient  quantity  of  a  certain  un- 
important commodity  had  been  bought  to  last  the  entire  Department  for  twenty  years 
at  the  present  rate  of  consumption. 


the  various  projects  develop  on  which  the  material  is  wanted.  Ordering- 
supplies  in  this  manner  is  unsatisfactory.  It  greatly  increases  the  office 
expense  for  purchasing,  it  prevents  the  combination  of  similar  requisitions 
in  order  to  obtain  wholesale  prices,  and  the  fact  that  immediate  delivery  is 
generally  demanded  makes  it  impossible  to  wait  for  favorable  markets  before 
buying. 

One  improvement  is  that  a  large  proportion  of  the  supplies  now  bought 
are  ordered  in  advance  and  instead  of  being  delivered  direct  to  the  consumer, 
are  consigned  to  the  nearest  storehouse,  where  they  are  inspected  and  stored 
and  later  delivered  from  stock  as  called  for  on  requisition.  In  this  case  the 
stores  act  as  distributing  depots. 

On  the  other  hand,  if  the  Bureau  of  Supplies  could  stop  doing  business 
on  a  "  commission  house  basis,"  much  further  good  would  result.  The  Chief 
of  the  Bureau  should  be  consulted  in  conference  by  the  other  bureaus — and 
should  be  thoroughly  informed  concerning  all  proposed  undertakings — a 
policy  which  has  been  strongly  advocated.  He  would  no  longer  wait  till 
notified  of  the  immediate  need  of  materials  before  purchasing  them,  but 
would  anticipate  the  future  requirements  of  the  department  and  prepare  a 
material  budget  to  supply  them. 

It  would  then  be  the  duty  of  the  Bureau  of  Supplies  to  keep  in  its  store- 
rooms a  stock  of  various  standard  goods  which  it  could  issue  immediately  on 
requisition.  The  storerooms  would  then  fulfill  their  proper  function  by  being 
real  collection  or  storage  depots. 

5.     The  amount   of  money   invested  in  material   should  be  kept   at  a 
minimum. 

Fixing  the  limits  of  stock  to  be  carried  is  most  important  and  is  treated 
in  detail  in  the  chapter  on  Storage  and  Issue.  It  is  pertinent  to  indicate 
here  while  discussing  the  relations  of  the  Bureau  of  Supplies  to  the  rest  of 
the  Department,  that  in  order  to  know  the  proper  amount  of  stock  to  keep 
on  hand,  the  Chief  of  the  Bureau  of  Supplies  should  be  in  close  touch  with 
the  work  of  the  Department  as  a  whole,  and  with  the  details  of  that 
"  program  "  so  often  before  referred  to,  which  is  supposed  to  regulate  all 
activities.  He  should  know  of  all  new  work  and  all  contemplated  improve- 
ments a  sufficient  time  in  advance  to  purchase  the  required  supplies  in  a 
favorable  market,  and  to  have  them  delivered,  inspected  and  ready  when 
needed.  He  should  be  informed  concerning  the  amount  and  nature  of  mate- 
rials necessary  to  be  kept  in  reserve  at  certain  points  for  various  emergencies. 
He  should  be  fully  posted  regarding  the  stores  required  for  current  operating 
purposes,  and  any  changes  in  "  policy  "  which  will  affect  the  same. 

I  "sing  these  facts  in  connection  with  the  data  on  the  time  required  to 
obtain  or  replenish  stock  by  purchase  or  transfer  makes  it  easy  to  calculate 
the  minimum  quantities  of  stock  to  be  kept  in  storage. 

The  question  of  the  proper  amounts  of  emergency  equipment,  spare 
parts,  tools,  implements  and  current  supplies  to  be  maintained  by  the  opera- 

10 


GROWTH  OF  THE  STORES  SYSTEM  UNDER  THE  BUREAU 

OF  SUPPLIES. 


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ting  divisions  is  most  important  though  apparently  it  has  not  yet  been  stand- 
ardized.* 

C.     Materials  should  be  properly  stored  and  issued. 

It  has  always  been  considered  a  grave  error  in  organization  to  place  the 
control  of  materials  and  supplies  (in  large  quantities)  in  the  hands  of  the 
men  who  use  them.  The  Bureau  of  Supplies  has  insisted  that  it  should  store 
all  materials  and  supplies  prior  to  issue,  under  the  care  of  responsible  men 
especially  detailed  to  that  work.  With  this  end  in  view,  it  has  always 
assumed  charge  of  storage  points  whenever  permitted  to  do  so  and  the 
accompanying  chart  graphically  shows  the  growth  of  its  responsibilities  in 
this  direction.  The .  economy  in  consumption  and  diminution  of  waste 
effected  by  this  control  has  -been  remarkable. 

The  previous  improper  methods  of  storage  and  accounting  for  supplies 
have  become  apparent  as  the  various  storage  points  have  been  placed  under 
the  jurisdiction  of  the  Bureau  of  Supplies.f 

Rules  for  the  care  and  storage  of  supplies  after  issue  from  stores  and 
while  in  the  hands  of  the  ultimate  consumers,  should  be  prepared  and 
enforced. 

7.  Supplies  should  be  put  only  to  the  use  intended. 

This  is  a  matter  only  partially  within  the  control  of  the  Bureau  of 
Supplies.  Purchasing  Agents  can  assure  themselves  that  goods  bought  are 
suitable  for  the  requirements,  and  storekeepers  can  report  when  goods 
requisitioned  out  of  stores  are  not  suited  to  the  ostensible  use  to  which  they 
are  to  'be  put,  as  stated  on  the  order.  They  can  also  prevent  deterioration  in 
stock  and  loss  from  theft  which  certainly  do  not  come  under  the  head  of 
'*  use  intended."  Beyond  that  they  cannot  go,  though  branding  and  marking 
stock  is  perhaps  a  further  safeguard. 

There  should  be  inspectors,  operating  along  the  lines  of  the  Inspector 
Generals  Department  of  the  regular  army,  whose  duty  it  should  be  to  investi- 
gate and  see  that  stores  once  issued  are  put  to1  the  proper  use. 

8.  Supplies  should  be  used  efficiently  and  economically. 

No  matter  how  careful  and  saving  the  Bureau  of  Supplies  may  be  in 
the  matter  of  purchase,  inspection,  storage  and  issue  of  supplies,  if  the  men 

*  The  Navy  Department  specifies  the  amount  of  ammunition  for  the  various 
guns  to  be  carried  by  the  warships  of  the  different  classes — just,  for  instance,  as  it  defi- 
nitely states  the  number  of  launches,  whaleboats,  cutters  and  so  forth  to  be  carried 
by  each  type  of  ship — and  then  further  goes  into  detail  regarding  the  number  of  oars 
and  other  articles  of  equipment,  such  as  masts,  sails,  tiller,  and  compass,  that  each 
of  the  small  boats  must  have.  In  this  manner  the  exact  quantity  of  stores  and  equip- 
ment for  every  pumping  station,  repair  company  or  other  point  under  the  control  of 
this  Department  should  be  established. 

t  In  one  case,  cement  in  bags  had  been  stored  on  the  earth  floor  of  a  barn  cellar, 
where  it  had  been  flooded  and  destroyed ;  in  another  case  rubber  goods  had  been 
placed  next  to  steam  pipes  and  ruined;  again,  hydrants  were  stored  in  a  pipe  yard 
so  that  they  filled  with  water.  This  was  discovered  just  before  the  first  hard  frost  of 
the  season  otherwise  they  would  have  burst. 

12 


using  the  material  use  it  inefficiently  or  waste  fully  it  will  soon  give  out  and 
have  to  be  replaced,  with  the  result  that  the  cost  of  supplies  to  the  Depart- 
ment (and  thus  to  the  taxpayer)  will  be  high. 

Again  we  have  a  condition  beyond  the  jurisdiction  of  the  Bureau  of 
Supplies  as  now  organized,  yet  vitally  affecting  the  amount  of  supplies  which 
have  to  t>e  bought.* 

9.  Supplies  should  be  kept  in  service  till  they  are  worn  out,  or  changed 

conditions  require  the  substitution  of  a  more  efficient  or  more 
economical  article. 

Loss  is  often  incurred  by  premature  replacement  of  materials.  To  the 
cost  of  the  new  article  must  be  added  the  cost  of  the  replacement  plus  the 
remaining  value  of  the  article  replaced,  which  can  seldom  be  used  elsewhere. 

10.  All   useless,   burdensome   and   foolish   restrictions  and   conditions 

should   be   removed   from   the   bidding   requirements   and   the 
specifications. 

The  City's  business  should  be  made  as  attractive  to  possible  bidders  as 
is  that  of  any  of  the  great  private  corporations.  On  the  contrary,  doing 
business  with  the  City  is  now  fraught  with  many  needless  annoyances  and 
restrictions.  Many  of  the  conditions  so  imposed  cause  the  contractor  actual 
expense,  while  others  merely  introduce  elements  of  uncertainty  and  possible 
loss  against  which  he  must  protect  himself  by  increasing  his  bid  proportion- 
ately. All  such  obstructions,  whether  actual  or  potential,  are  ever  present 
handicaps  to  proper  economy. 

Some  of  these  conditions  are  imposed  by  law ;  others  are  the  result  of 
bad  purchasing  methods,  improperly  worded  specifications,  inefficient  office 
procedure  or  conduct  of  employees. 

It  is  foolish  to  imagine  that  the  lowest  possible  prices  have  been  obtained 
merely  because  the  letting  was  public,  bids  being  taken,  and  the  award  made 
to  the  lowest  'bidder ;  for  many  may  not  have  ibid  who  otherwise  would  have 
been  glad  to  put  in  a  price,  and  others  who  did  bid  might  have  bid  lower. 

A  detailed  study  of  these  matters  will  be  found  in  the  chapter  on 
Purchasing. 

Board  of  Survey. 

The  disposition  to  be  made  of  excess  stores  or  equipment  and  obsolete 
or  damaged  material  constitutes  the  one  remaining  point  where  the  activities 

*  As  an  example  of  this  point,  how  is  money  to  be  saved  by  the  best  of  coal 
specifications,  by  payment  on  the  B.  T.  U.  basis  (for  the  heat  the  coal  can  give,  not  for 
its  weight),  by  well  advertised  competitive  bidding,  and  by  careful  weighing,  inspection 
and  analysis  of  coal  delivered,  if  the  coal  so  bought  is  wastefully  burned  under  the 
boilers?  If  coal  is  badly  stoked  so  that  much  of  its  gases  go  up  the  chimney  uncon- 
sumed  as  smoke,  if  a  stack  temperature  twice  what  it  should  be  indicates  that  the 
blowers  are  rushing  the  gases  through  the  boilers  and  away  to  waste,  before  the 
boilers  have  had  a  chance  properly  to  abstract  the  heat  from  them,  or  yet  again,  if 
an  analysis  of  the  ashes  shows  a  great  amount  of  unburned  carbon,  all  savings  in 
purchasing  will  be  neutralized. 

13 


of  the  Bureau  of  Supplies  are  so  closely  related  to  those  of  other  'branches 
of  the  Department  that  friction  has  often  resulted. 

This  work  can  best  be  done  by  a  Board  of  Survey,  consisting  of  an 
official  of  the  Bureau  of  Supplies,  and  a  "  staff  "  engineer.  They  should 
periodically  inspect  and  survey  all  stores,  equipment,  engine  spare  parts  or 
other  supplies  owned  by  the  Department  for  the  purpose. 

1.  Of  condemning  (and  ordering  to  be  sold)  all 

(a)  obsolete  material 

(b)  damaged  material  not  fit  to  be  repaired. 

2.  Of  ascertaining  whether  such  material  as  may  be  damaged  or  worn 
is  worth  repairing,  and,  if  worth  repairing,  directing  that  said  work  be  done. 

Method  of  Financing  the  Work. 

The  work  of  the  Department,  particularly  the  letting  of  contracts  and 
the  purchasing  of  supplies  is  very  much  hindered  by  the  way  funds  are 
appropriated.  First  there  is  a  segregated  budget,  later  an  apparently 
unlimited  transfer  of  funds  is  permitted. 


NEW    WORK    RECOMMENDED. 


The  preparation  of  a  Material  Budget. 

The  organization  of  a  Systematic  Inspection  of  Departmental  Supplies  by  a 

Board  of  Survey. 

Separate  treatment  for  issues  of  Consumable  and  Non-consumable  materials. 
The  adoption  of  a  Cheaper  Distributing  System. 
Auto-trucks  for  deliveries  from  Storerooms. 
Investigation  and  Study  of  Supply  Prices. 
Method  to  Prevent  Unbalanced  Bidding  in  Contracts,  as  is  now  done  on 

Open  Orders. 
Completion  of  Storeroom  at  Ridgewood  and  at  Other  Points. 


14 


PHOTO.     1.— OLD     STOREROOM     AT     179TII     STREET     PUMPIXd     STATION     IN     USE 
PRIOR    TO     ESTABLISHMENT     OF    BUREAU     OF     SUPPLIES. 


PHOTO.     2.— NEW     STOREROOM     AT     179TH     STREET— THE     FIRST     OF     THE     NEW 

GENERAL    STOREROOMS    EQUIPPED    AND    OPERATED    BY    THE 

BUREAU    OF    SUPPLIES. 


o 

c 

E 


Cfl  W 

W  -* 

«  J3 

o  •£ 

^  -si 

w  I  * 

^  & 

K  5 


Q    3 

§  S 
°  1 

I  I 


I 


AV 


STORES 
RECORDS. 

Statistics, 

CT/riPERATION\{nventories' 
OF  STORE  ROOMS\Reports. 

AND  YARDS. 

Storage  Issue 

and  Distribution 

of  Supplies. 


\ 


INSPECTION 

OF  SUPPLIES. 
Acceptance, 


HE  DUT1C 

OF  THE 

CHIEF 

OF  THE 

BUREAU  OF 
SUPPLIES 

INVOLV 


COI 

DUTIES. 

PERFECTION  or  OR6ANIM1 
Special  Repo 

Methods  of/  ROUTINE 
Operation/     DUTIES. 

Assignment  of  Employees 
to  Stations  &  Work,  Corres 
dence,  Reports,  Approval 
of  Requisitions  for  Supplies. 


D 


menfs. 


SUPER- 
VISION 
of 

Letting    Open 
arket  Orders 


STUDY  OF  PRICES. 
Study  of  Market 
Conditions,       /  en 
Preparation  of  /  ^ 
Standard      /  r\ 
Specificationy  -^ 

VISION    V 

of 

Letting 
Contracts. 


SUPER- 


CHAPTER II. 


ORGANIZATION  AND  ADMINISTRATION 

The   analysis   of  the  work  into  its    separate   functions,    and    the 
development  of  a  system  of  procedure  to  carry  it  into  effect. 


Several  things  require  attention  when  taking  hold  of  a  new  problem. 
First,  the  nature  of  the  work  must  be  investigated  and  the  general 
question  settled  concerning  what  is  to  be  done.  Then  the  details  of  the 
plan  for  carrying  these  ideals  into  execution  must  be  formulated — that  is 
Organization.  The  doing  of  the  work  according  to  such  plans  is  Admin- 
istration or  Operation. 

It  should  be  clearly  understood  that  the  study  of  the  situation,  the 
planning  of  the  work,  and  the  organization  of  the  Bureau  of  Supplies  was 
a  constructive  problem ;  whereas  the  operation  of  the  Bureau  in  accordance 
with  the  principles  thus  formulated  is  a  routine  or  administrative  matter. 

Conditions   Governing  the   Reorganization. 

The  first  problem  in  the  organization  of  the  Bureau  of  Supplies  con- 
cerned the  internal  affairs  of  the  Bureau  itself,  the  object  being  to  system- 
atize and  direct  the  work  so  that  it  might  be  done  correctly  at  the  least  cost. 
The  Bureau  of  Supplies  purchases,  inspects,  stores  and  issues  all  materials 
used  by  the  Department  and  lets  all  contracts  for  work  done  and  services 
rendered,  thus  dealing  with  the  most  vital  functions  of  a  going  concern 
whose  operation  could  be  neither  stopped  nor  delayed.  All  changes  had  to 
be  so  made  that  they  would  not  interfere  with  the  work.  The  pumping 
stations  had  to  have  coal  and  oil  even  though  the  specifications  for  coal  and 
oil  were  not  perfected ;  nor  would  the  lack  of  a  general  stores  control  system 
have  excused  withholding  supplies  from  a  pumping  station  simply  because 
the  need  for  them  had  not  been  investigated. 

Another  element  which  complicated  the  situation  was  the  fact  that  the 
time  for  carrying  the  reform  into  effect  was  limited,  so  it  was  necessary  first 
to  remedy  those  matters  which  involved  the  largest  expenditures  or  the 
greatest  amount  of  waste. 

21 


FUNCTIONAL    ORGANIZATION    CHART,    BUREAU    OF 

SUPPLIES. 


All  requisitions  originating  in  the  various  Bureaus  of 
the  Department  for  the  purchase  of  supplies  for 
services,  and  for  construction,  maintenance  or  repair 
work  involving  both  Ihe  furnishing  of  materials  and 
the  rendering  of  services,  are  forwarded  to  the  Bureau 
of  Supplies  that  prices  for  the  same  may  be  obtained 
and  the  order  or  contract  therefor  duly  placed. 


All  supplies,  whether  obtained  by  contract  or  on 
open  order  are  at  once  inspected  by  the 

Bureau  of  Supplies . 
Construction, maintenance  and  repair  work  is 

usually  inspected  by  the  Bureau  for  which 

the  work  is  done, 


This  division  is  responsible  for  the  physical  control 
of  supplies  in  storage  .    All  supplies  delivered  to 
store  rooms  are  inspected ,  storea  and  issued  . 
An  inventory  of  stock  is  kept.  Repairs  are  made. 
Scrap  is  sorted  and  worthless  materials  are  sold. 
Materials  are  transferred  from  one  storeroom  or 
storeyard  to  another  as  the  needs  of  the 
Department  may  require.    The  storerooms  act 
as  distributing  centers,  and  local  deliveries 
are  made    by  automobile   trucks. 


Functional  Organization. 

The  work  was  mapped  out,  the  various  duties  being  classed  according 
to  their  nature  into  Purchasing,  Inspecting  and  Storage  and  Issue  of  supplies. 
A  diagram  of  the  organization  was  prepared  and  the  duties  of  the  per- 
sonnel assigned  in  accordance  with  these  functions. 

Standardization  of  Procedure. 

Conditions  and  procedure  were  next  standardized  so  that  work  was  no 
longer  done  in  a  haphazard  manner  or  left  to  chance. 

All  steps  in  every  activity  of  the  Bureau  were  studied  and  instructions 
were  prepared  showing : 

What  work  was  to  be  done. 
How  the  work  was  to  be  done. 
Where  the  work  was  to  be  done. 
When  the  work  was  to  be  done. 
Who  was  to  do  it. 

These  standard  practice  instructions  systematized  and  simplified  the 
routine  of  the  office  so  that  it  could  be  carried  on  by  the  fewest  possible 
number  of  employees  and  in  the  least  time.  To  instruct  employees  con- 
cerning what  they  have  to  do,  and  how  they  are  to  do  it,  not  only  prevents 
conflicts  of  authority,  but  fixes  responsibility  and  shows  whether  or  not  the 
work  is  being  attended  to. 

The  routine  has  been  made  as  simple  and  as  flexible  as  possible.  The 
magnitude  of  the  business  makes  it  impossible  for  the  men  at  the  head  to 
keep  familiar  with  all  details ;  subordinate  officials  are  trained  to  assume 
responsibilities  within  their  grasp.  Though  the  line  of  authority  is  strictly 
maintained  and  orders  are  given  in  accordance  therewith,  all  employees  are 
expected  to  co-operate  and  furnish  information  and  assistance  to  one  another 
whenever  possible. 

The  philosophy  of  the  arrangement  has  been : 

First — To  standardize  the  routine  work  so  that  it  becomes  practically 

automatic. 
Second — To  place  responsibility  for  details  with  men  having  sufficient 

time  and  first  hand  knowledge  of  the  facts  to  pass  upon  them. 
Third — To  release  the  men,  who  by  reason  of  experience,  knowledge 

and  skill,  are  at  the  top  of  the  Bureau,  from  functional  activity  so 

that  they  are   free   for  the  larger  creative  and  administrative 

duties. 

At  the  beginning  of  the  present  administration,  the  departmental  units 
in  the  various  boroughs  obtained  prices  for  supplies  separately,  and  in 
order  to  obtain  greater  efficiency,  this  work  was  concentrated  in  one  central 
office.  This  resulted  in  a  slight  reduction  in  the  force,  tending  to  unify  the 

23 


ORGANIZATION  OF  PERSONNEL,  BUREAU  OF  SUPPLIES. 


organization  and  give  better  control.  The  values  of  centralization,  how- 
ever, were  not  alone  brought  about  by  locating  all  employees  doing  similar 
work  in  one  office ;  the  main  advantage  lay  in  the  opportunity  to  improve 
upon  the  old  methods  in  which  requests  for  purchase  of  supplies  were 
prepared  in  the  various  boroughs  without  knowledge  of  standards  or  of 
stock  possibly  on  hand  elsewhere ;  and  in  which  these  individual  requisitions 
were  handled  separately,  and  consequently  uneconomically. 

The  concentration  of  goods  on  hand  was  next  undertaken  and  store- 
rooms were  fitted  up  at  central  locations  where  supplies  could  be  con- 
veniently delivered,  promptly  inspected  and  properly  stored,  issued  and 
accounted  for. 

Training  the  Employees. 

Training  the  employees  was  next  undertaken.  It  is  all  very  well  to 
study  conditions  and  develop  the  most  scientific  and  efficient  procedure,  yet 
without  the  intelligent  co-operation  of  the  men  required  to  carry  it  out, 
progress  will  be  slow.  They  must  be  instructed  in  their  duties — they  must 
have  explained  to  them  in  detail  what  is  expected  to  be  done  and  how  and 
when  and  where  and  by  whom.  They  must  be  "  coached  "  with  the  same 
care  and  thoroughness  that  is  used  with  the  members  of  a  professional  ball 
team,  a  college  crew,  or  the  detail  working  of  a  coast  defense  gun.  It  calls 
for  much  persistency,  for  old  habits  must  be  broken  before  new  ones  can  be 
acquired,  and  the  men  must  be  tried  at  this  and  at  that  to  see  where  they 
best  fit  in,  as  a  man  can  only  do  his  best  work  when  adjusted  to  the  organi- 
zation. Alas,  some  men  do  not  appear  to  be  much  good  anywhere.  Mili- 
tary discipline  is  very  necessary  but  most  difficult  to  obtain  where  the  man 
in  charge  lacks  the  power  of  the  "  bounce." 

It  is  necessary  that  there  be  no  "  indispensable  men."  Such  ones  are 
the  most  dangerous  units  in  any  organization,  for  sooner  or  later  they  are 
taken  sick  or  die,  or  get  a  better  position  elsewhere,  and  the  work  suffers 
since  they  were  "  indispensable,"  and  there  is  no  one  prepared  to  take 
their  place.  There  should  be  one  or  more  men  regularly  trained  as  "  under- 
study "  for  every  position. 

Only  the  most  incompetent  object  to  this  policy  after  it  is  explained 
that  the  "  indispensable "  man  stands  in  his  own  light  as  regards  pro- 
motion and  advancement,  for  with  no  one  fitted  to  take  his  place  he  must 
perforce  be  left  in  it,  and  some  other  man  given  the  coveted  vacancy 
higher  up,  when  such  occurs. 

Besides  making  the  force  adaptable,  such  training  tends  to  make  a 
man  do  his  own  particular  duties  better  and  more  intelligently  since  he 
sees  their  relation  to  the  work  as  a  whole.  It  gives  him  interest  and  it 
enables  him  to  suggest  improvements  of  value  where  other  branches  of  the 
work  touch  his. 

Furthermore,  careful  observation  of  the  men  during  the  periods  when 
they  are  being  trained  and  "-tried-out  "  in  the  different  positions  affords 

25 


BUSINESS    PROCEDURE,    BUREAU    OF    SUPPLIES. 
Main  Steps   Between   Receipt  of   Requisition  and   Delivery  of   Goods. 


Open  Order 
Branch 


Inspection 
Division 


Direct 
Deliveries 


Stores 
Division 


Bureau  of 
WaterRcgister 

Bureau   of 
WaterSupply 

Bureau  of 
Gas&Oectricity 

Bureau  of 
Audit  &  Account 

Bureau  of 
Water  Register 

Bureau   of 
Water  Supply 

Bureau  of 
Gas&Electricity 

Bureau  of 
Audit  &  Account 

excellent  opportunities  to  study  their  capacities  and  abilities  and  to  finally 
assign  them  where  they  will  be  most  effective. 

Improved  Conditions. 

The  old  conditions  under  which  the  office  work  was  carried  on  were 
most  unsatisfactory.  The  clerks  faced  a  low  railing  which  separated  them 
from  the  space  where  the  public  came  to  make  inquiries  and  transact  busi- 
ness. This  resulted  in  constant  interruption  of  the  work.  The  office 
arrangements  were  shifted,  one  of  the  changes  being  that  the  desks  were 
turned  away  from  the  public  and  faced  toward  the  wall.  Further  to  save 
the  time  of  the  higher  paid  clerks,  all  telephone  calls  and  all  personal  in- 
quiries of  individuals  were  first  answered  by  a  boy  who  found  out  what 
was  wanted;  and  in  the  majority  of  cases  was  able  to  attend  to  it  himself 
without  interrupting  the  other  men. 

Wherever  roll  top  desks  were  found,  flat  top  desks  were  substituted, 
and  four-legged  cane-bottom  chairs  took  the  place  of  the  swivel  and  padded 
variety. 

The  space  allotted  to  the  storage  of  goods  was  fitted  up  to  best  serve 
the  -purpose.  Bins  were  especially  designed  and  were  built  to  hold  the  par- 
ticular kind  and  quantity  of  goods  to  go  in  them. 

System  and  standardization  has  been  extended  to  all  devices  used  for 
keeping  the  office  records ;  and  the  new  forms,  ledgers  and  cards  that  have 
been  introduced  are  a  vast  improvement  over  the  miscellaneous  collection  of 
papers  which  they  superseded. 

It  is  clear  that  all  business  must  keep  records  of  its  activities  and 
transactions,  but  beyond  that  point  ideas  are  often  vague  or  at  variance. 
The  nature,  extent  and  character  of  the  statistics  best  suited  to  the  problems 
in  hand  have  received  much  study.  So  truly  do  "  circumstances  alter  cases  " 
that  any  attempt  to  take  the  forms  and  blanks  of  some  railroad  or  other 
corporation  and  graft  them  bodily  upon  a  different  business  is  foolish. 
It  is  as  if  the  Republic  of  Hayti  should  solemnly  adopt  the  Revised  Statutes 
of  the  United  States  and  enact  them  as  the  law  of  their  land,  expecting  in 
consequence  immediately  to  enjoy  a  similar  government.  Improvements 
are  not  accomplished  that  way.  Even  with  the  best  of  systems,  specially 
designed  to  meet  the  needs  of  any  business,  the  personalities  of  the  men 
in  charge  are  the  governing  factors. 

A  great  deal  of  the  work  has  been  pioneering,  for  there  is  but  little 
information  available  to  guide  in  formulating  the  philosophy  underlying 
such  an  undertaking.  Still  less  is  there  to  guide  one  when  it  comes  to  the 
carrying  of  it  out.  Many  a  promising  experiment  gave  unsatisfactory  results. 
But  then  the  Chinese  Navy  is  the  only  one  that  never  has  any  accidents 
— for  it  never  goes  to  sea.  Mistakes  often  occurred,  as  was  to  be  expected 
where  new  methods  of  doing  business  were  being  developed,  but  the  same 
mistake  seldom  occurred  twice. 

27 


There  is  much  general  misunderstanding  con- 
cerning city  purchasing  methods.  Section  419 
of  the  Charter  says : 

"  Whenever  any  work  is  necessary  to 
be  done  to  complete  or  perfect  a  par- 
ticular job,  or  any  supply  is  needful 
for  any  particular  purpose,  which  work 
and  job  is  to  be  undertaken  or  supply 
furnished  for  The  City  of  New  York, 
and  the  several  parts  of  the  said  work 
or  supply  shall,  together,  involve  the  ex- 
•penditure  of  more  than  one  thousand 
dollars,  the  same  shall  be  by  contract, 
under  such  regulations  concerning  it  as 
shall  be  established  by  ordinance  or 
resolution  of  the  board  of  aldermen,  ex- 
cepting .  .  ." 

The  respective  procedure  for  both  Contracts 
and  Open  Orders  is  illustrated  on  Chart  opposite. 
It  is  instantly  seen  that  the  letting  of  a  contract 
is  a  complicated  matter,  as  the  papers  must  be 
referred  to  many  different  officials  and  passed 
upon  by  them.  The  aggregate  time  thus  con- 
sumed is  great,  therefore  contracts  cannot  be 
used  to  purchase  supplies  needed  immediately  or 
to  do  work  which  is  urgent.  This  is  one  of  the 
reasons  that  open  market  orders  are  of  necessity 
so  frequently  resorted  to. 


PROCEDURE   CHART. 


I BORO.  ENGINEER.  [ 

I 

(D£RCOHMISSIOHa| 
I 

IDEP.CH.F.NG'R.}- 


OPEN  ORDER  PROCEDURE 

INVITATIONS  TO  Bio  SENT  OUT 
Bios  OPENED  AND  TABULATED 
To  AUDITOR  FOB  RECORD. 
ORDERS  TYPEWRITTEN 

ORDER  SIGNED  ev  DEPUTY &Acnw«  Com. 
CONTRACTOR  NOTIFIED  TO  PROCEED 


GOODS  ISSUED  TO  ORIGINATING  BUREAU. 


THESE   RECORDS   SHOW 
WHETHER 

THERE  is  ANY  IN  STOCK  ? 
THERE  is  ANY  ORDERED? 
THERE  is  ANY  SPECIFICATION? 
THE  QUANTITY  is  CORRECT  ? 
THE  QUALITY   is  SUITABLE? 

CONTRACT  PROCEDURE 

DRAFT  TO  CORPORATION  COUNSEL. 
DRAFT  TO  CITY  RECORD  FOR  PRINTING. 
PROOF  TO  ORIGINATING  BUREAU. 
PROOF  TO  CORPORATION  COUNSEL. 
PROOF  RETURNED  FOR  FINAL  PRINTING. 
PRINTED  CONTRACTS  TO  ORIGINATING  BORCAU 
To  COMPT.  FOR  REPORT  TO  B«TD.  OF  ESTIMATE. 
PRINTED  CONTRACT  TO  CORP.  COUNSEL. 
ADVERTISEMENT  TO  CITY  RECORD. 
BIDS  OPENED  AND  TABULATED. 
MEMO.  OF  Bios  TO  ORIGINATING  BUREAU. 
MEMO.  OF  BIDS  TO  COMM.  FOR  APPROVAL. 
MEMO.  &  Low  BID  TO  AUDIT  BUREAU. 
NOTICE  OF  AWARD  TO  SUCCESSFUL  BIDDER. 
COMPTROLLER  NOTIFIED  TO  RCTURN  DEPOSITS. 
Low  BID.  ETC,TO  COMPT.  FOR  SURETIES. 
CONTRACTOR  NOTIFIED  TO  SIGN  CONTRACTS. 
CONT.  TOSuRETIES  FOR  SIGNATURE. 
CONTRACT  SiftNED  BY  COMMISSIONER 
CONTRACT  CERTIFIED  BY  COMPTROLLER. 
CONTRACTOR  NOTIFIED  TO  PROCEED. 


GOODS  DELIVERED. 


1 1      ACTIVITIES  NOT  UNDCRTHE  BUREAU  orSuppues 

HH      WORK  DONE  By  THE  BUREAU  or  SUPPLIES. 


TIME   REQUIRED   TO   LET  A   CONTRACT. 
Aggregate  188  Days. 


Auditing  Bureau -4-  Days. — 

Sureties-  4-  Days. 1 

Contractor  -  5  Days: 


Notices  of  A  ward.  etc.  -  2  Days. 
Bureau  of  Supp//es  -  2  Days. 
Commissioner  -  /  Day. 


ADVERTISING 
16  Days 


FINANCE 

DEPARTMENT 


52  Days 

Report  to  Board  of  Estimate , 
Approval  of  Sureties, 
Certification  of  Contract,  etc 


LAW 
DEPARTMENT 

22  Days 
on  legality 


ORIGINATING 
BUREAU 


PRINTING 
43  Days 


37  Days 

Correcting  froof. 

Appro  wry  forrrts, 
Report  on  bids 
rece/red. 
efc. 


Prepanny  proof, 
Mating  a/ferotions, 
Pr/ntmg  final  contracts, 

dec. 


This  chart  is  based  on  a  study  of  twenty  different  contracts  and  gives  the  average  amount  of 
time  taken  by  the  various  steps  of  the  present  procedure  from  the  receipt  of  the  draft  of  the  contract 
(plans,  specifications,  etc.)  by  the  Bureau  of  Supplies  to  the  notice  to  the  contractor  to  begin  work. 

The  Bureau  of  Supplies  has  been  able  to  expedite  the  work  in  many  instances  by  filing  duplicate 
copies  of  certain  papers  with  two  or  more  officials  simultaneously.  This  saving  averaged  sixteen 
day*,  thereby  reducing  the  average  total  time  to  one  hundred  and  seventy-two  days. 

Some  contracts,  such  as  those  for  the  purchase  of  coal  and  other  supplies,  are  made  up  on  a 
blank  form  of  standard  contract,  whereby  certain  of  the  preliminary  steps  of  the  contract  procedure 
become  unnecessary.  In  consequence  they  may  be  and  are  let  in  much  less  time. 


UNIVERSITY 


CHAPTER  III. 


PURCHASING 

Details  concerning  the  preparation  of  contracts  for  work  or  materi- 
als— and  the  Rules  for  purchasing  supplies  in  order  to  obtain 
the  right  materials  in  proper  quantities  at  the  lowest  price. 


The  Bureau  of  Supplies  lets  all  contracts  for  the  purchase  of  material, 
and  for  the  doing  of  work  and  the  rendering  of  services.  When  the  present 
reorganization  began  two  years  ago,  its  share  in  these  activities  was  much 
restricted,  in  fact  it  merely  acted  as  agent  for  the  other  Bureaus,  and  bought 
what  it  was  told  to  'buy ;  or  contracted  for  what  it  was  told  to  contract  for, 
in  a  purely  mechanical  way.  It  was  assumed  that  all  work  ordered  was 
really  required  and  that  all  supplies  requisitioned  were  necessary  and  were 
correct  as  regarded  quality,  quantity  and  suitability  for  the  use  intended. 
Furthermore,  it  was  taken  for  granted  that  the  specifications  furnished  the 
Bureau  of  Supplies  not  only  described  the  work  to  be  done  or  the  material 
to  be  furnished  in  a  proper  manner,  but  that  they  were  so  worded  that  the 
work  could  be  done  economically  and  the  supplies  furnished  at  rock  bottom 
prices.  This  was  not  so. 

The  cost  of  construction  and  the  time  it  takes  not  only  depend  on  the 
extent  and  nature  of  the  undertaking,  but  are  largely  affected  by  the  condi- 
tions under  which  the  work  is  to  be  done,  and  the  specifications  governing 
it.  Every  large  contract  raises  the  question  whether  it  is  better  to  let  the 
work  as  a  whole  or  in  parts.  If  the  former  method  is  adopted,  the  subse- 
quent work  of  the  department  is  simplified  because  there  is  'but  one  party  to 
do  business  with,  and  responsibility  is  easily  placed.  On  the  other  hand, 
when  the  work  is  let  in  parts,  competition  is  extended,  as  many  bids  will  be 
received  from  individuals  or  firms  unable  to  undertake  the  entire  project,  yet 
able  and  desirous  of  bidding  on  part  of  it. 

Another  most  important  question  concerns  the  advisability  of  taking 
bids  on  the  'basis  of  a  lump  sum  for  the  whole  work,  or  requiring  the  bidder 
to  state  the  unit  prices  for  which  he  will  do  given  quantities  of  work,  as  so 
much  per  cubic  yard  of  rock  excavation,  or  per  cubic  yard  of  concrete,  or 
per  square  yard  of  street  paving.  The  former  method  involves  the  question 
of  extras,  the  latter  generally  results  in  unbalanced  bidding,  unless  steps  are 
especially  taken  to  prevent  it. 

These  and  many  other  matters  of  like  nature  are  questions  of  policy 
directly  affecting  the  cost  of  construction. 

31 


Specifications,  too,  play  their  part  in  affecting  prices.  The  general 
clauses  (those  which  describe  the  work,  fix  the  times  of  commencing  and 
finishing  it,  set  forth  the  terms  of  payment,  define  the  contractor's  duties  and 
his  liabilities,  state  the  manner  in  which  plans  shall  be  interpreted  or  disputes 
settled,  and  appoint  the  conditions  governing  the  conduct,  maintenance  and 
completion  or  abandonment  of  the  contract),  are  no  less  important  than 
those  special  clauses  which  supplement  the  maps  and  drawings  and  indicate 
in  detail  the  quality  of  the  materials  to  be  used  or  the  methods  to  be 
employed. 

All  this,  however,  has  not  fallen  within  the  province  of  the  Bureau  of 
Supplies,  either  to  praise  or  blame.  Time  was  limited,  and  the  activities 
of  the  purchasing  division  have  been  concentrated  on  that  no  less  interesting 
problem  of  developing  a  correct  buying  policy — a  "  Philosophy  of  Purchas- 
ing Supplies,"  if  you  please — and  then  putting  it  into  effect. 

"  Philosophy  of  Purchasing  Supplies."* 

Two  questions  present  themselves  to  every  man  who  would  introduce 
new  and  efficient  methods  in  any  'branch  of  business. 

The  first  matter  to  be  determined  is : 

What  work  is  to  be  done? 
and  the  second: 

How  is  it  to  be  done  ? 

It  took  much  study  to  ascertain  and  formulate  the  fundamental  prin- 
ciples of  correct  purchasing  which  are  the  answer  to  the  first  question,  but 
once  determined  they  proved  to  be  quite  simple.  They  may  foe  concisely 
stated  thus :  Get  the  right  materials  in  correct  quantities  at  the  lowest  price. 

These  ideals  have  been  the  foundation  on  which  the  new  purchasing 
methods  of  this  Department  have  been  built.  They  involve  much  more  than 
the  mere  filling  of  such  requisitions  as  are  sent  in;  the  lowest  price  being 
assumed  to  have  been  secured  because  the  bidding  was  competitive.  Such 
procedure  is  merely  doing  a  commission  house  business.  When  a  requisition 
is  filled  according  to  its  terms  there  is  no  assurance  that  the  goods  called  for 
are  those  best  suited  for  the  purpose  for  which  they  are  to  be  used,  that  the 
quantities  called  for  are  reasonable,  or,  finally,  that  the  articles  ordered  are 
so  specified  that  standard  prices  can  be  obtained. 

The  answer  to  the  second  question,  "  How  is  the  work  to  be  done  ?"  is 
found  in  the  detailed  matters  of  policy  that  have  been  developed  and  the 
rules  and  regulations  that  have  been  written  down  to  carry  them  into  effect. 
These  methods  of  procedure  will  be  considered  in  the  order  in  which  they 
relate  to  the  purchasing  sequence  of  right  materials,  correct  quantities  and 
lowest  price. 

*This  was  the  title  of  a  paper  presented  by  the  author  at  the  Thirty-second 
Annual  Convention  x>f  the  American  Water  Works  Assn.  at  Louisville,  Ky. 

32 


RIGHT    MATERIALS. 

The  duty  of  always  purchasing  the  "  right  materials  "  is  the  most  im- 
portant and  difficult  that  confronts  the  purchasing  agent.  The  right  material 
does  not  necessarily  mean  the  best  grade  of  stock  in  the  market,  neither  does 
it  mean  the  cheapest  that  will  suffice  for  the  purpose.  White  pine  is  better 
than  spruce,  yet  white  pine  is  not  the  "  right  material  "  with  which  to  build 
temporary  shelves ;  engines  can  be  run  with  a  cheap  oil,  yet  a  cheap  oil 
is  not  the  "  right  material  "  with  which  to  lubricate  expensive  engines,  for 
the  extra  cost  of  repairs  to  the  engines  will  offset  a  thousand  times  the 
saving  in  the  cost  of  the  oil. 

The  "  right  material "  is  the  material  most  suitable  to  the  purpose 
for  which  it  is  intended  and  containing  the  greatest  units  of  value 
(service)  per  unit  of  cost. 

This  is  a  very  approximate  definition  and  requires  careful  explanation. 
Goods  to  be  suitable  must  not  always  be  merely  reliable  under  ordinary  con- 
ditions, they  must  often  be  dependable  under  special  conditions.  A  hose 
which  might  burst  would  be  perfectly  satisfactory  for  flushing  the  streets, 
but  it  would  not  do  for  fire  service. 

The  term  "units  of  value"  (service)  must  needs  be  amplified.  One 
often  hears  the  expression :  "  It  costs  a  little  more,  but  it  will  wear  twice 
as  long."  The  "  wear  "  represents  the  units  of  service. 

One  oil  is  cheaper  than  another,  yet  perhaps  it  takes  twice  as  much  of 
it  to  accomplish  the  same  result.  One  grade  of  coal  is  cheaper  per  ton  than 
another,  yet  the  freight  cost  of  the  inferior  fuel  is  the  same  as  on  the  better 
one,  while  the  possible  necessity  of  requiring  a  blower  to  burn  it,  and  the 
cost  of  the  extra  fire  room  force  for  stoking  and  handling  clinker  and  ash 
sometimes  make  the  cheap  fuel  an  expensive  economy. 

Also  it  generally  does  not  pay  to  expend  good  labor  on  poor  material. 
The  cost  of  carpenter  work  on  poor  lumber  is  as  great  as  on  good  stock. 
People  often  fail  to  consider  the  small  part  the  value  of  the  materials  in  a 
finished  article  bear  to  the  larger  costs  of  labor,  overhead,  etc.,  required. to 
produce  it. 

Not  only  must  the  cost  of  the  supply  itself  be  taken  into  account;  the 
cost  of  placing  the  supply  in  operation  is  also  a  factor  of  the  situation.  It 
is  easy  to  realize  that  some  materials  might  be  of  such  poor  quality  that, 
even  if  they  were  to  be  obtained  for  nothing,  one  could  not  afford  to  use 
them,  because  the  cost  of  frequent  replacements  would  outweigh  the  saving 
in  price  on  the  article  replaced. 

Standardization  of  Materials. 

It  has  therefore  been  one  of  the  first  and  most  important  duties  of  the 
Bureau  of  Supplies  to  determine  the  various  grades  or  qualities  of  materials 
which  will  be  furnished  for  specific  purposes. 

33 


This  work  should  be  done  more  extensively,  and  with  the  hearty  con- 
sent, advice  and  co-operation  of  the  other  Bureaus  concerned. 

Multiplicity  of  styles  and  types  of  stock  is  a  costly  nuisance  and  a 
serious  disadvantage.  It  necessitates  unproductive  investments  in  stock,  it 
increases  costs  of  storage  and  supervision,  and  leads  to  mistakes,  confusion, 
and  loss  of  time  in  making  issues.  A  list  containing  all  the  various  items 
regularly  requisitioned,  and  in  current  demand,  should  be  prepared. 
These  items  should  be  considered  with  regard  to  their  cost,  nature,  com- 
position, wearing  power,  keeping  qualities,  and  the  conditions  under  which 
they  are  to  be  used.  The  prevailing  practice  at  the  present  time  consists  in 
having  the  man  who  is  going  to  use  supplies  make  out  an  order  for  the 
quantity  and  quality  that  he  wants.  This  order  is  forwarded  through  various 
officials  in  his  Bureau  and  is  finally  passed  on  to  the  Bureau  of  Supplies  for 
them  to  make  the  purchase.  Such  procedure  is  all  wrong. 

In  the  first  place  such  methods  often  result  in  men  in  the  class  of 
laborers  being  the  ones  who  ultimately  settle  on  the  quality  of  materials 
ordered.  Contrary  to  prevailing  opinion,  workmen  who  use  materials  them- 
selves seldom  order  what  is  best  suited  to  their  conditions.  They  are 
particularly  open  to  influence  by  salesmen  or  agents  and  generally  order  by 
some  trade  name,  with  very  little  idea  of  the  article's  real  merit  or  those  of 
its  competitors.  The  preparation  of  specifications  for  supplies  is  a  "  staff  " 
matter,  requiring  the  thought  and  attention  of  high  grade  men.  The  careful 
measurements  of  the  testing  laboratory  and  the  precise  and  exact  experiments 
of  the  chemical  laboratory  should  be  the  guide  to  the  writer  of  specifications 
rather  than  the  (generally  biased)  opinion  of  some  subordinate  official  in 
the  operating  department.  The  shape  and  size  of  shovel  best  suited  to  certain 
coal,  the  proper  type  wheelbarrow  for  moving  ashes,  the  most  durable  variety 
of  broom,  should  all  be  determined  by  the  tests  of  experts.  And  what  is 
more,  these  tests  should  be  made  and  these  questions  ascertained.  The 
"  right  material  "  should  be  selected  in  every  instance  and  its  use  made 
mandatory.  Even  the  fittings  and  equipments  should  be  standardized. 

It  is  of  prime  importance  to  have  all  equipment  of  similar  nature  inter- 
changeable. If  this  were  done,  the  number  of  spare  parts  necessary  to  main- 
tain an  adequate  reserve  would  be  comparatively  few.  If  stations  are 
equipped  with  valves  and  fittings  of  different  sizes  and  dimensions  (distance 
between  faces  of  the  flanges,  etc.),  similar  special  stock  made  only  by  the 
same  manufacturer  will  ever  after  be  requisitioned  for  all  replacements  ar 
such  points,  on  the  ground  that  goods  of  another  make  having  different  sizes 
could  not  well  be  used.  This  stifles  competition.* 

The   standardization   of   supplies  has   many   other   important    features 


*  In  this  particular  the  adoption  of  standards  for  the  Department — such  as  those 
recently  agreed  upon  by  the  Master  Steam  Fitters'  Association,  the  American  Society 
of  Mechanical  Engineers  and  the  Heating  and  Ventilating  Engineers  in  the  "  U.  S. 
Standard  Schedule  Requirements  "—would  effect  a  great  simplification  and  improve- 
ment over  existing  conditions. 

34 


besides  having  experts  determine  what  material  is  best  to  use  for  any  given 
purpose.* 

The  standardization  of  supplies  simplifies  the  work  of  the  man  ordering 
supplies,  as  it  merely  becomes  necessary  for  him  to  refer  to  the  number  of  a 
specification  instead  of  preparing  a  long  written  description  (often  accom- 
panied by  drawings)  of  what  he  wants  every  time  he  wants  it. 

Standardization  of  supplies  reduces  the  office  wqrk  of  the  Purchasing 
Division  and  should  enable  the  same  number  of  clerks  to  transact  more 
business  in  less  time. 

Standardization  of  supplies  is  of  great  value  in  reducing  costs  inasmuch 
as  it  permits  the  combination  of  various  requisitions  for  the  same  material 
and  the  purchase  of  the  lot  at  one  time  at  wholesale  rates.f 

Standardization  of  supplies  reduces  the  labor  connected  with  making 
inspections  and  expedites  such  work. 

Standardization  of  supplies  permits  great  improvement  to  be  made  in 
the  storekeeping  system.  It  means  less  money  invested  in  stock,  less  stock 
to  'be  stored  and  looked  after,  and  less  paper  work  in  connection  with  stores 
records,  inventories  and  reports.  The  stock  on  hand  moves  faster  and  there 
is  less  loss  from  depreciation,  or  of  stock  becoming  obsolete.;): 

In  the  absence  of  such  standardization,  there  is  a  tendency  to  order  the 
highest  grade  obtainable  when  the  goods  are  not  to  be  paid  for  by  the  man 
doing  the  ordering.  This  habit  of  ordering  goods  of  far  higher  grade  than 

*  Men  ordering  material  often  have  very  hazy  ideas  concerning  what  they  want, 
as  letters  on  file  in  the  Bureau  of  Supplies  will  show.  The  following  are  extracts 
from  letters  written  to  get  adequate  information  on  which  to  make  purchases : 

"  SIR — I  notice  among  the  articles  called  for  by  you  are  six  25- foot  lengths 
2T/^-inch  hose.  Please  state  whether  the  hose  required  is  water,  steam  or 
suction  hose,  also  what  specifications  are  to  be  used." 

"SiR — In  order  to  prevent  further  misunderstanding,  it  is  desirable  that 
quantity  and  quality  of  articles  to  be  delivered  should  be  definitely  stated.  Your 
requisition  calls  for  5  rolls  of  two-ply  tar  paper,  without  stating  the  number  of 
feet  or  yards  in  each  roll;  it  also  calls  for  one  keg  of  roofing  cement  without 
stating  the  number  of  pounds  said  keg  is  to  contain.  These  are  merely  cited 
as  instances." 

"SiR — Under  the  heading  of  Metals  and  Alloys,  sheet  brass  is  ordered  and 
its  thickness  is  stated  to  be  of  a  certain  gauge.  There  is  no  universally  accepted 
standard  gauge,  and  therefore,  the  engineer  should  state  whether  he  desires 
Birmingham  or  Brown  &  Sharp  gauge.  We  buy  sheet  brass  by  the  pound,  so 
it  is  necessary  to  know  the  weights  of  the  sheets  as  well  as  their  size  for  bid- 
ding purposes.  Information  should  also  be  furnished  as  to  whether  soft,  hard 
or  spring  brass  is  desired.  Roofing  tin  is  called  for,  but  no  specifications  have 
been  submitted ;  nor  have  we  any.  It  is  necessary  that  the  number  of  tins  to  the 
box,  the  size  and  quality  be  ment:oned  *  *  *." 

t  Ordinarily,  every  man  running  an  engine  has  some  favorite  boiler  compound 
which  he  has  always  ordered.  Though  many  stations  drew  feed  water  from  the  same 
source,  their  various  requisitions  were  different  and  could  not  be  combined.  When  the 
water  was  analyzed  bv  one  of  the  Department's  chemists  and  the  proper  compound  for 
that  water  determined,  the  various  requisitions  could  be  combined  and  a  large  amount 
of  the  proper  material  for  all  the  stations  purchased  at  one  time. 

$  Stock  should  be  ordered  with  an  eye  to  its  greatest  usefulness.  Thus  spiral  and 
coil  packing  should  be  used  as  far  as  possible  in  preference  to  ring  packing,  for 
"  i/£ -inch  spiral"  will  perhaps  fit  a  dozen  different  piston  rods  of  various  diameters 
carrying  a  ^-inch  packing  space,  and  as  packing  is  a  supply  that  deteriorates  the 
spiral  and  coil  packing  will  be  in  constant  demand  and  none  will  be  left  on  the  shelves. 

35 


is  warranted  by  the  use  to  which  they  are  to  be  put  is  often  traceable  to  the 
fact  that  men  seem  to  feel  that  it  relieves  them  from  responsibility  for  any 
possible  failure  of  the  article  when  in  service.  Generally,  however,  it  is 
plain  extravagance.*  Whatever  its  cause,  it  is  an  expensive  habit,  and  the 
present  method  of  the  Bureau  of  Supplies  is  (except  in  rare  cases)  to  fill 
all  requisitions  with  articles  of  standard  commercial  grades  and  to  enable 
this  to  be  done  the  pew  forms  of  requisitions  require  a  statement  of  the 
specific  use  to  which  the  articles  are  to  be  put.f 

Another  tendency  of  men  who  write  requisitions  for  which  they  do  not 
pay  out  of  their  own  pockets,  is  to  prepare  some  special  design  that  suits 
their  fancy;):  rather  than  order  standard  ready-made  articles.  Men  seem 
particularly  prone  to  do  this,  especially  if  they  can  call  on  the  services  of  a 
departmental  carpenter  to  carry  their  plans  into  effect. 

If  requisitions  for  unusual  materials  or  for  articles  of  special  design 
can  be  eliminated,  and  standard  materials  for  the  same  purpose  purchased 
in  their  place,  a  large  saving  in  cost  can  generally  be  effected. 

There  are  many  circumstances  when  materials  of  even  the  highest 
quality  are  none  too  good,  particularly  so  where  the  cost  of  replacement  is 
high  compared  to  the  cost  of  the  article;  or  where  any  failure  on  the  part 
of  the  material  in  service  might  result  in  serious  consequences.  This  not 
alone  refers  to  accidents  resulting  from  defective  materials  (often  the  result 
of  poor  inspection),  but  to  those  conditions  where  reliability  is  of  the  very 
utmost  importance.  Supplies  purchased  for  the  high  pressure  fire  service 
may  be  taken  as  examples.  Everything  connected  with  the  system  must  be 
of  such  excellence  that  the  pumps  can  be  depended  on  to  operate  without 
hitch  whenever  needed  for  as  long  a  period  as  necessary.  Similarly  steam- 
ship engineers  not  only  demand  supplies  of  the  first  quality,  but  at  the  end 
of  every  run  they  overhaul  their  engines  and  equipment  and  replace  many  an 
article  capable  of  giving  still  further  service,  in  order  that  the  possible  neces- 
sity of  stopping  to  make  repairs  at  sea  may  be  reduced  to  a  minimum. 

*  Extract  from  a  report  to  the  Commissioner  : 

"  SIR— The  original  requisition  included  a  number  of  pieces  of  expensive 
furniture  and  required  close  scrutiny.     I   objected  to  the  large  sum  required 

for  new  desks  to  be  used  at. and   substituted   desks    from  the 

Finance  Department,  which  cost  us  nothing  and  which  were  moved  and  put 
in  perfect  order  for  $16  each.  Similar  furniture  new  would  have  cost  about 
$60  apiece." 

t  Men  order  hand-picked  waste  when  machine-picked  is  in  every  way  as  suitable 
for  the  purpose  for  which  it  is  to  be  used.  (A  requisition  was  received  for  some  white 
pine  for  shelving,  "  26-inch  by  3-inch  by  16-feet  long."  The  man  drawing  the  requisition 
failed  to  consider  that  16-foot  planks  are  selected  stock  and  correspondingly  expensive. 
In  this  case  the  purchasing  division  altered  the  requisition  and  bought  the  material  by 
the  board  foot,  in  which  case  it  was  delivered  in  assorted  lengths  of  12,  14  and  16 
feet,  which  are  every  bit  as  good  for  cutting  up  for  shelving.) 

t  The  following  extract  is  taken  from  a  report  on  a  requisition  for  furniture, 
drawing  tables,  etc.:  "Another  item  to  which  I  objected  was  a  'plan  case,'  to  be 
made  in  accordance  with  elaborate  specifications  at  a  cost  of  $175.  A  standard  case 
made  by  -  -  &  -  -  Co.  ($51.50)  and  serving  every  purpose  was  finally  sub- 
stituted by  Mr.  -  — .  (This  means  much  quicker  delivery  than  could  be  obtained 
were  a  complicated  piece  of  furniture  made  to  order)." 

36 


ANALYSIS    OF   ANNUAL    CONTRACT    EXPENDITURE. 


4  4,000,000 


3,000,000 


2,000,000 


1.000,000 — £-5 


500,000 


100,000 


Specifications. 

Specifications  are  the  description  of  work  to  be  done  or  supplies  to  be 
furnished.  They  are  the  contractor's  guide  in  preparing  his  bid  or  estimate 
and  they  set  forth  and  govern  the  relations  of  the  contracting  parties  after 
they  have  entered  into  their  mutual  agreements.  The  first  requirements  of  a 
good  specification  are  that  it  should  be  precise,  definite  and  comprehensive. 

Nothing  should  be  left  to  the  imagination  in  the  writing  of  specifica- 
tions. If  the  man  desiring  an  article  purchased  or  a  piece  of  work  done 
knows  what  he  wants,  let  him  describe  it  in  straight,  clean-cut,  unmistakable 
langague.  This  takes  more  time,  but  it  is  worth  it.  Adjectives  and  adverbs 
are  particularly  objectionable.  To  say  that  work  must  be  done  "  properly  " 
or  "  suitably  "  or  in  a  "  workmanlike  manner  "  does  not  really  mean  anything 
because  what  one  man  will  consider  "  proper  "  or  "  suitable  "  another  holds 
to  be  quite  the  contrary.  Such  expressions  cause  great  uncertainty,  they 
develop  confusion,  misunderstanding,  hard  feelings  and  delay,  and  they 
contain  such  opportunities  for  unfairness  and  graft  that  they  should  not  be 
tolerated.  The  clause  that  work  must  be  done  or  supplies  delivered  "  to  the 
satisfaction  of  the  engineer  or  inspector  "  causes  every  prudent  contractor  to 
bid  high  in  self  defense. 

Everywhere  it  would  appear  that  many  men  charged  with  the  carrying- 
out  of  important  projects  give  most  of  their  attention  to  matters  of  design 
and  are  vague  or  indefinite  when  it  comes  to  describing  the  way  the  work 
is  to  be  carried  on  or  those  relations  and  responsibilities  between  the  con- 
tracting parties  which  so  greatly  affect  the  costs  of  the  work.  Either  they 
do  not  know  their  own  minds  or  if  they  do,  they  are  so  slipshod  or  neglectful 
that  they  do  not  give  the  contractor  who  is  to  bid  on  the  work  any  clear  idea 
of  what  is  expected  of  him,  so  that  he  can  figure  closely.  If  honest,  he 
protects  himself  with  a  large  allowance  in  his  bid  for  "  contingencies,"  which 
ultimately  is  paid  for  by  those  for  whom  the  work  is  done. 

The  careful  scrutiny  of  specifications  sent  to  the  Bureau  of  Supplies, 
aided  by  the  co-operation  of  many  who  prepare  requisitions,  has  worked 
wonders  in  effecting  improvements.  A  few  examples  of  former  specifica- 
tions may  be  of  interest. 

The  following  are  extracts  from  a  report  (14  September,  1911)  to 
Commissioner  Thompson  on  a  contract  for  "  Cutting  grass,  weeds,  brush, 
etc.,"  criticizing  the  "  loose  "  manner  in  which  specifications  were  drawn. 

"  As  an  example,  I  refer  you  to  paragraph  2. 

"*  *  *  'Quality  of  Work:  All  work  shall  be  done  in 
a  thorough  '  farmer-like  '  manner ;  the  cutting  shall  be  as  close 
to  the  surface  of  the  ground  as  possible.' 

"  What  is  a  '  farmer-like  '  manner?  And  how  close  to  the  sur- 
face of  the  ground  is  it  possible  to  cut  ?  The  answer  to  these 
questions  is  like  that  to  the  old  query:  'How  long  is  a  stick?' 
*  *  *  '  It  all  depends/ 

38 


"  I  maintain,  Sir,  that  adjectives  have  but  a  small  place  in  a 
specification,  where  precision  and  definiteness  of  ideas  are  most  to  be 
desired.  Vague  language  results  in  certain  misunderstanding  and 
annoyance,  probable  delay  and  possible  law  suits. 

"  Another  sentence  reads : 

"  '  Sanitary  precautions  shall  at  all  times  be  satisfactory  to  the 
Engineer,  to  the  Department  of  Health  of  the  City  of  New  York, 
and  to  the  State  Board  of  Health ;  and  the  contractor  shall  promptly 
and  fully  comply  with  all  orders  and  regulations  relating  to  this 
matter/ 

"  The  contractor  may  well  wonder  by  whom  the  orders  he  is  to 
receive  are  to  be  given  and  what  he  is  to  do  in  case  of  a  conflict  of 
opinion  on  the  part  of  the  learned  authorities  above  named." 

Standardization  of  Specifications. 

The  Charter  of  the  City  of  New  York  has  a  provision  which  states : 

"  No  patented  article  shall  be  advertised  for,  contracted  for,  or 
purchased,  except  under  such  circumstances  that  there  can  be  a  fair 
and  reasonable  opportunity  for  competition." 

Most  purchasing  agents  in  municipalities  and  in  the  government  serv- 
ice are  bound  by  similar  conditions.  Therefore,  in  mentioning  the  article 
desired,  it  has  been  customary  to  add  the  phrase,  "  or  equal."  The  question 
now  arises  as  to  what  the  quality  really  is.  Because  the  article  delivered 
is  different  from  the  article  called  for  it  does  not  signify  that  it  is  not 
equal  to  it;  "  equality  "  does  not  mean  "similarity";  it  may  be  different 
and  superior,  in  which  case  it  must  be  accepted.  It  may  be  different  and 
yet  equal,  in  which  case  it  must  also  be  accepted;  or,  peradventure,  it 
may  be  different  and  inferior,  in  which  case  it  ought  to  be  rejected. 

When  supplies  are  needed  now  the  requisitions  do  not  call  for  any 
particular  firm's  product,  and  add  "  or  equal,"  but  particular  qualifications 
are  called  for  instead,  and  bids  are  taken  in  accordance  with  such  specifica- 
tions. 

The  question  of  determining  whether  the  quality  of  goods  delivered 
is  up  to  that  called  for  is  oftentimes  more  than  the  ordinary  inspector  can 
answer,  and  it  sometimes  puzzles  even  the  experts.  For  instance,  it  re- 
cently became  necessary  to  purchase  certain  recording  pressure  gauges,  and 
the  engineer  requisitioning  the  gauges  said  that  he  wanted  X's  (naming  a 
well-known  maker)  "  or  equal."  Representatives  of  the  principal  firms 
making  such  articles  were  requested  to  state  the  chief  points  of  a  high-grade 
recording  pressure  gauge,  which  would  determine  whether  the  article  offered 
was  equal  to  what  was  wanted.  They  were  practically  given  the  opportunity 
of  writing  the  specifications  under  which  the  department  would  purchase 
their  product,  but  it  was  particularly  pointed  out  to  them  that,  as  they 
were  all  reputable  manufacturers  .handling  high-grade  articles,  they  had  to 

39 


ask  a  fair  price  for  them;  hence  if  they  made  the  specifications  too  easy 
it  would  permit  an  unscrupulous  dealer  to  furnish  an  inferior  article  at  a 
price  below  any  figure  which  they  could  afford  to  quote. 

The  difficulty  which  these  men  found  in  describing  their  product  was 
most  interesting.  It  was  finally  suggested  that  the  four  points  to  be  con- 
sidered were:  Materials  of  construction,  details  of  construction,  workman- 
ship and  accessories.  In  fact,  almost  any  desired  class  of  article  can  be 
closely  described  when  one  states  what  it  is  made  of,  how  it  is  made,  and 
the  details  of  its  construction. 

It  is  necessary  to  be  specific.  Thus,  in  describing  certain  parts  of 
these  gauges  it  was  specified  that  they  must  be  made  of  "  non-corrosive 
metal " ;  whereupon,  I  further  specified  the  metals  that  would  be  con- 
sidered non-corrosive.  Some  water  meters  were  recently  requested,  and  the 
officer  drawing  the  requisition  stated  that  "  they  must  be  accurate."  "  Ac- 
curate "  is  a  comparative  term,  and  would  have  led  to  possible  bickering  and 
controversy,  so,  instead,  it  was  definitely  stated  what  percentage  of  error 
would  be  allowed. 

The  purchasing  agent  who  deals  solely  with  high-grade  salesmen  rep- 
resenting established  business  houses  with  jealously  regarded  reputations, 
knows  nothing  of  the  trials  and  tribulations  of  the  man  who  must  receive 
tenders  from  anyone  who  chooses  to  put  in  a  bid.  One  time  when  the 
Bureau  advertised  for  "  boxes  of  matches  "  without  stating  the  number  each 
box  should  contain,  the  low  bidder  attempted  to  deliver  little  boxes  similar 
to  the  kind  cigar  stores  pass  out  with  every  purchase  of  a  box  of  cigarettes. 
In  another  instance  a  man  delivered  feather  dusters  which  averaged  about 
seven  feathers  each  and  gravely  contended  that  he  was  within  his  rights  as 
the  number  of  feathers  had  not  been  specified. 

Conferences  with   Manufacturers. 

The  ordinary  salesman  knows  nothing  of  the  factory  conditions  where 
his  goods  are  produced,  nor  is  he  acquainted  with  the  technique  of  pro- 
duction to  an  extent  which  enables  him  to  tell  how  any  change  in  specifica- 
tions will  affect  costs.  Many  purchasing  agents  have  but  a  clerical  training, 
with  no  testing  laboratory  experience,  and  have  no  adequate  idea  of  the 
conditions  under  which  the  goods  they  purchase  are  to  be  used.  The  sales- 
man and  the  purchasing  agent  meet  on  the  old  ground  of  mutual  suspicion, 
and  discuss  prices  and  discounts. 

The  most  satisfactory  thing  to  do  is  to  get  the  production  engineer  and 
the  factory  superintendent  to  meet  the  engineer  who  is  to  use  the  product. 
The  producer  shows  how  certain  customary  requirements  increase  cost  with- 
out corresponding  increase  in  efficiency.*  The  man  using  the  materials 

*  The  Department  had  been  in  the  habit  of  calling  for  "bone  filtered  oil"  for  its 
engines.  Now,  bone  filtered  oil  looks  better  in  the  oil  cups  yet  it  costs  more  and  gives 
no  better  lubrication.  Its  abandonment  was  suggested  by  an  oil  manufacturer. 

40 


tells  of  the  difficulties  he  has  encountered,  and  often  finds  he  has  not  been 
calling  for  the  proper  material,  nor  using  it  correctly.  Both  sides  profit 
from  such  meetings.  The  Bureau  of  Supplies  has  recently  rewritten  its 
specifications  for  lubricants,  after  such  conferences,  in  which  many  of  the 
principal  oil  firms  in  the  country  were  represented.  As  an  example,  where 
before  we  had  but  one  specification  for  cylinder  oil  three  were  prepared, 
one  for  pressures  below  100  pounds  without  superheat,  one  for  pressures 
above  100  pounds  without  superheat,  and  one  for  superheat  conditions. 
Not  only  were  the  requirements  of  the  product  specified,  but  the  manner 
of  testing  was  made  clear  and  definite. 

Purchasing  by  Samples. 

Much  purchasing  is  done  by  showing  a  sample  of  what  is  wanted 
rather  than  by  writing  a  specification.  This  method  is  most  often  used 
when  it  is  desired  to  match  a  piece  of  furniture  or  a  piece  of  hardware  or 
for  some  similar  purpose.  Aside  from  these  circumstances,  it  has  no  excuse 
except  when  one  is  purchasing  articles  of  such  trivial  value  that  they  do  not 
warrant  the  cost  of  preparing  a  written  description  of  what  is  wanted.  Pur- 
chasing by  sample  is  analogous  to  the  custom  of  ordering  a  certain  make  of 
goods  "  or  equal."  The  objections  to  this  way  of  doing  business  have  just 
been  pointed  out  in  a  previous  paragraph.  It  is  generally  infinitely  better 
to  state  clearly  what  is  wanted,  what  it  is  to  be  made  of  and  how. 

A  classic  example  of  what  sometimes  happens  when  a  sample  is  used 
was  unearthed  during  the  reorganization  of  the  purchasing  division.  A 
certain  old  piece  of  worn-out  hose  kept  in  a  storeroom  some  distance  away 
had  for  years  been  referred  to  as  the  sample  of  what  should  be  furnished. 
Of  course  it  was  understood  that  the  goods  to  be  furnished  were  to  be  new, 
yet  the  sample  was  not  easily  accessible  and  when  a  prospective  bidder  did 
see  it,  he  had  no  way  of  determining  the  number  of  the  ply  (it  had  couplings 
on  each  end)  and  neither  he  nor  the  Department  could  make  any  claim 
regarding  that  point  nor  the  quality  of  the  canvas,  the  composition  of  the 
rubber  or  the  pressure  it  should  stand. 

Specifying  Details  vs.  Calling  for  Results. 

It  often  happens  that  what  men  desire  is  results  and  that  they  con- 
cern themselves  but  little,  if  at  all,  with  the  way  they  are  produced. 

Specifications  based  on  this  principle  state  what  is  wanted  and  leave  the 
rest  to  the  ingenuity  of  the  contractor.  It  often  happens  that  a  clever  man, 
left  to  his  own  devices,  will  develop  most  novel  and  economical  ways  of 
achieving  a  desired  result,  and  will  be  able  to  underbid  all  competitors. 
However,  when  this  way  is  adopted,  there  should  be  no  interference  with 
the  methods  employed  to  bring  about  the  results.  Do  one  of  two  things. 
Either  tell  the  contractor  what  you  want  in  the  way  of  a  result,  or  else 

41 


state  in  detail  the  way  the  work  is  to  be  done,  and  then  abide  by  the  con- 
sequences. Nothing  is  more  unfair  than  to  describe  in  detail  the  par- 
ticular methods  to  be  followed  in  doing  a  piece  of  work  and  then  require  a 
warranty  as  to  the  result.* 

Purchasing  Goods  on  Trial. 

Goods  could  be  purchased  on  the  basis  of  their  satisfactory  perform- 
ance in  actual  use.f  The  idea  is  that  specifications  are  merely  a  device  to 
enable  the  purchaser  to  predict  the  probable  value  of  his  purchase,  and 
since  what  he  wants  is  results,  it  would  be  well  to  take  articles,  put  them  in 
service  and  try  them  out.  If  they  gave  satisfaction,  pay  for  them.  If  they 
did  not,  reject  them  and  return  them  to  the  maker.  In  this  case  it  would  be 
necessary  to  state  what  performance  would  be  regarded  as  meeting  require- 
ments. However,  this  plan  is  only  capable  of  limited  application.  Many 
supplies  might  not  be  needed  at  once,  others  would  require  a  life  time  to  test 
out,  and  men  want  their  money  as  soon  after  delivery  of  their  wares  as 
possible.  The  purpose  of  specifications  is  therefore  not  alone  to  set  up 
standards  regarding  the  kind,  size  and  excellence  of  the  product  desired, 
but  in  the  majority  of  cases  it  is  to  enable  the  department  to  say  in  advance 
with  a  fair  degree  of  certainty  whether  or  not  goods  will  probably  render 
satisfactory  service,  so  that  payments  can  be  made  promptly. 

Revision   of   Specifications. 

It  generally  happens  that  the  men  who  purchase  supplies  do  not  come 
in  contact  with  them  when  in  use  and  have  no  information  concerning  the 
value  and  the  wearing  qualities  of  the  goods  they  buy.  The  closeset  relations 
should  exist  between  the  purchasing  and  the  operating  divisions,  and  specifi- 

*  The  makers  of  steel  rails  have  told  the  railroads  that  they  will  produce  a  rail 
of  a  given  composition  in  a  prescribed  way,  or  they  will  roll  a  rail  in  accordance  with 
their  own  notions  of  what's  what,  and  guarantee  it  to  render  a  certain  service;  but 
they  will  not  attempt  to  follow  the  railroad's  specifications  and  then  guarantee  the 
result. 

fit  has  been  suggested  by  the  Bureau  of  Supplies  that  the  difficulty  the  Depart- 
ment has  had  in  getting  a  satisfactory  specification  for  rubber  valves  for  the  pumps 
might  be  obviated  by  this  method.  The  chemical  and  other  laboratory  tests  for  pump 
valves  are  difficult  and  often  unsatisfactory  in  detecting  substitutes.  Controversies 
arise.  Some  makers  claim  that  our  specifications  call  for  an  article  which  is  costly 
but  not  necessarily  better  than  many  others. 

What  is  really  wanted  is  a  valve  to  meet  certain  severe  service  conditions.  Labor- 
atory tests  are  a  device  resorted  to  to  indicate  the  probable  action  of  the  valve  when 
used.  Therefore  why  not  do  away  with  all  laboratory  tests  and  call  on  manufacturers 
to  state  a  price  at  which  they  will  keep  certain  pumps  properly  supplied  with  valves 
for  a  given  period— say  six  months?  If  a  maker  has  half  the  faith  in  his  product  that 
he  claims  to  have,  he  should  not  object  to  entering  into  such  an  agreement. 

A  somewhat  similar  form  of  contract  has  been  made  for  lubricating  certain  of 
our  engines  and  pumps  on  the  "  output  basis."  The  contractors  (always  some  oil 
company)  supply  all  oil  necessary  and  are  paid  so  much  per  thousand  revolutions  of 
the  engines.  The  theory  is  that  they  will  prefer  to  supply  a  small  quantity  of  some 
high  grade  oil  rather  than  the  larger  quantity  that  would  be  necessary  were  in- 
ferior grades  furnished.  It  becomes  to  the  contractor's  advantage  to  furnish  good 
material. 

42 


o 
o 
o 
o 


§ 
§ 


Horse    &    Wagon     (Hire.  Core,  Etc.) 


Meters,  Water  (  New.  Setting.  Repairs.) 


Labor  &  Materials   ( Improvements,  Mains,  etc) 


Machinery  £  Repairs  to  Machinery 


Motor  Ve hides  (Hire,CoretFtepoirs.  Supplies)       j 


Operation  Doyis  &Fornum  Engines  j 


Street    Repairs 


Tools  &  Equipment 


Fuel  Cool  &  Wood  I 


Equipment 


Pipes  &  Fittings 


New   Equipment  (Plant) 


Furniture 


Services,  Professional 


Building  Materials 


Laboratory  Supplies 


Illumination  &  Power 


Office  Supplies  (ice. Towels. Etc.) 


Hardware 


Electricol  Supplies 


Lubricants 


Blue  &  Litha  Prints 


Metals 


Maintaining    Lamps 


Castings 


Caulking  Materials  lYarn.  Pig  Lead; 


Hydrants 


Packing 


Clothing 


Paints 


Expressage 


Pitometer    Supplies 


Driving    Wells 


Plant  Supplies 


Fountain  Repairs 


Cotton  Waste 


Printing  ft  Multigraphing 


ANALYSIS 

OF    ANNUAL 

OPEN  ORDER  EXPENDITURE 


Rubber   Valves 


Photographic  Supplies 


Miscellaneous 


cations  should  be  continually  amended  to  include  improvements  and  to  ex- 
clude materials  which  do  not  give  satisfaction. 

Many  valuable  suggestions  would  be  furnished  by  a  Board  of  Survey 
(see  page  13)  passing  on  all  old  equipment  and  deciding  whether  damaged 
material  is  worth  repairing  or  should  be  scrapped,  and  whether  material 
alleged  to  be  inefficient  should  be  discarded.  The  Board  would  thus  obtain 
information  concerning  the  way  different  supplies  and  materials  act  when 
in  service  and  what  ultimately  renders  them  unfit  for  further  use.  Such 
notes  would  be  of  great  assistance  to  the  purchasing  division. 


CORRECT     QUANTITY. 

The  problem  of  purchasing  the  right  quantity  of  supplies  at  a  time  is 
complex  and  depends  for  its  solution  on  data  all  of  which  the  Bureau  of 
Supplies  has  so  far  been  unable  to  gather.  The  principles  governing  the 
matter  are  here  formulated  that  there  may  be  a  clear  idea  of  the  infor- 
mation required,  and  the  ways  to  go  about  getting  and  using  it. 

1st.  There  must  be  records  showing  the  total  quantity  and  nature 
of  all  stock  on  hand. 

It  was  found  that  many  requisitions  for  supplies  were  based  on  the 
orders  of  previous  years,  irrespective  of  whether  such  material  had  been 
used,  and  without  considering  that  conditions  and  requirements  often 
changed  in  the  meanwhile. 

Inventory. 

"  A  complete  inventory  of  the  property  of  the  department  under  the 
jurisdiction  of  the  Bureau  of  Supplies  has  been  undertaken  and  completed. 
It  is  incomprehensible  that  the  matter  was  never  attended  to  before.  As  a 
result  of  this  inventory,  complete  control  of  stores  may  be  obtained  in  the 
near  future. 

"  A  record  of  the  goods  stored  in  each  of  the  central  storerooms  is  kept 
on  a  card  system  at  that  point.  This  is  changed  from  day  to  day  as  goods 
are  received  or  issued,  so  it  is  always  up  to  date.  A  similar  record,  using 
ledgers,  is  kept  in  the  central,  or  stores  control  office.  It,  too,  is  always  kept 
posted  by  means  of  the  reports  of  "  stores  received  "  and  "  stores  issued  " 
sent  in  from  the  various  storerooms  at  the  close  of  each  day's  work.  I  re- 
gard the  successful  working  out  of  this  control  as  one  of  the  most  im- 
portant achievements  of  my  administration  of  the  Bureau  of  Supplies,  for, 
as  I  pointed  out  in  my  last  annual  report :  "  When  this  is  completed,  it  will 
prevent  the  purchase  of  material  of  which  we  already  have  sufficient  in 
stock,  and  it  will  facilitate  the  transfer  of  surplus  material  from  one  bor- 
ough to  another  to  meet  any  sudden  emergency  or  other  demand."* 

*  Extract  from  the  1912  Annual  Report  to  the  Commissioner  by  the  Author. 

44 


2nd.  A  material  budget  should  be  prepared  containing  the  annual 
amount  of  all  staple  supplies  used  by  the  department.  This  data  should 
be  ultimately  extended  to  give  the  average  monthly  consumption  of 
each  item. 

The  Bureau  of  Supplies  might  collect  such  information  from  the  records 
of  material  issued  from  stores  and  material  purchased  for  direct  delivery  to 
consumer.  This  would  be  a  left  handed  way  of  proceeding,  however,  for 
many  issues  are  not  used  immediately  but  are  held  in  local  storerooms  (be- 
yond the  present  jurisdiction  of  the  Bureau  of  Supplies)  for  subsequent  use. 
The  proper  study  of  the  question  should  begin  with  an  investigation  con- 
ducted by  "  staff  "  experts  of  all  points  under  the  department  where  supplies 
are  used,*  for  the  purpose  of  determining  the  nature  of  the  work  done  and 
whether  or  not  the  supplies  consumed  are  excessive,  normal,  or  economical, 
compared  to  the  results  obtained.  Incidentally,  this  would  be  a  most  in- 
teresting feature  of  an  "  efficiency  survey  "  of  the  activities  of  the  whole 
department. 

By  adding  together  the  amounts  of  material  thus  found  to  be  necessary, 
one  would  arrive  at  a  very  good  budget  for  material  needed  for  current 
operation. 

3rd.  The  amount  of  material  needed  to  meet  the  plans  for  new 
work,  repairs,  renewals,  and  so  forth  (wherever  the  same  are  to  be  pur- 
chased by  the  Department)  should  be  carefully  calculated  when  the 
said  undertakings  are  decided  upon,  and  the  Supply  Bureau  immediately 
informed. 

As  practically  all  work  of  this  nature  is  presumed  to  be  done  in  ac- 
cordance with  a  definite  program,  the  information  bearing  on  the  supplies 
can  be  furnished  months  in  advance  of  the  day  they  are  needed. 

Knowing  approximately  the  total  amounts  of  the  various  supplies 
needed,  the  amount  of  them  to  get  at  any  one  time  can  be  determined  by 
considering  each  item  separately. 

While  there  are  many  advantages  in  purchasing  in  wholesale  quantities, 
there  are,  on  the  other  hand,  certain  disadvantages  which  should  be  taken 
into  account. 

Reasons  for  Purchasing  Large  Quantities  at  One  Time  Are: 

1.  To  take  advantage  of  wholesale  rates. 

2.  To  have  orders  sufficiently  large  to  tempt  manufacturers  to  bid 

direct  and  thus  cut  out  middlemen's  profits. 

3.  To  profit  by  the  proportionate  lower  cost  of  delivering  large  quan- 

tities of  goods  at  one  time. 


*  This  investigation  should  be  made  in  connection  with  the  work  of  establishing 
standards  of  equipment  and  grades  of  material  as  recommended  on  page  34  of  this 
report. 

45 


4.  To  secure  sufficient  stock  at  times  when  prices  are  low  to  last  over 

until  low  prices  again  occur. 

5.  To  reduce  the  cost  of  the  purchasing  division  by  having  a  few  large 

orders  to  attend  to  rather  than  a  lot  of  small  ones. 

6.  To  reduce  the  cost  of  inspections  by  decreasing  their  number. 

Disadvantages  of  Buying  a  Large  Quantity  of  Any  Material  at  One  Time. 

1.  Room  is  required  to  store  goods;  space  is  valuable. 

2.  Supervision  required  over  goods  in  storage  which  costs  money. 

3.  Interest  on  money  tied  up  in  unproductive  materials. 

4.  Insurance  and  taxes. 

5.  Deterioration  of  stock. 

The  results  should  not  be  guessed  at ;  they  should  be  carefully  figured  out. 

LOW   PRICE. 

Every  endeavor  has  been  made  to  make  all  purchases  at  the  lowest 
price  possible.  The  subject  of  price  has  been  investigated  from  the  stand- 
point of  the  bidder  (the  man  who  quotes  the  price),  and  obstructions  have 
been  removed  and  conditions  arranged  so  that  business  may  be  transacted 
with  the  utmost  economy. 

Quarterly  Contracts. 

An  endeavor  has  been  made  to  eliminate  the  "  middleman  "  wherever 
possible  and  to  deal  direct  with  the  maker  of  the  goods.  In  order  to  interest 
manufacturers  and  get  them  to  bid,  it  is  necessary  to  purchase  fairly  large 
quantities  at  a  time.  Previous  to  the  present  administration  of  the  Bureau 
of  Supplies,  goods  were  purchased  immediately  upon  receipt  of  the  requisi- 
tions requesting  them,  and  irrespective  of  the  smallness  of  the  quantity 
called  for.  This  meant  purchasing  from  supply  houses  in  small  quantities 
at  irregular  intervals  and  at  high  retail  prices.  To  remedy  this,  the  prin- 
ciple was  adopted  of  purchasing  supplies  on  quarterly  contract — requisitions 
for  supplies  needed  for  a  considerable  period  of  time  being  sent  in  in 
advance. 

This  greatly  increased  the  quantity  of  the  various  materials  to  be  ob- 
tained at  one  time.  Furthermore,  requisitions  by  different  men  for  similar 
supplies  were  then  combined  in  an  endeavor  to  tempt  manufacturers  to  bid 
direct.  It  is  very  advantageous  to  do  business  after  this  fashion  with  the 
makers  of  goods.  It  reduces  delay,  it  lessens  possible  misunderstanding,  it 
centers  responsibility,  it  saves  middlemen's  profits  and  results  in  low  unit 
cost  of  delivery. 

Combination   of  Requisitions. 

The  attempted  combination  of  all  requisitions  for  materials  to  be  used 
for  like  purpose  at  various  points  throughout  the  department,  in  order  to 

46 


purchase  the  whole  amount  at  one  time  at  wholesale  prices,  first  showed 
the  imperative  necessity  for  standardizing  the  current  supplies.  Not  only 
is  there  great  difference  in  the  nature  and  quality  of  supplies  ordered  by 
different  men  for  identical  purposes,  but  it  often  takes  careful  scrutiny 
to  recognize  the  relationship  between  various  requisitions  for  the  same 
material.  For  instance,  one  man  will  order  rope,  specifying  its  diameter; 
another  man  wants  rope  of  a  certain  circumference,  a  third  wants  rope  which 
will  weigh  so  much  per  lineal  foot.  Yet,  as  a  matter  of  fact,  they  all  want 
the  same  size  rope,  and  have  only  described  it  in  different  ways. 

Moreover  to  carry  out  this  policy  of  letting  contracts  quarterly  orders 
were  issued  throughout  the  department  during  the  fall  of  1911  that  requisi- 
tions be  immediately  prepared  for  such  supplies  as  would  be  needed  during 
a  three  months'  period,  and  then  sent  to  the  Bureau  of  Supplies,  that  the 
same  might  be  contracted  for  as  soon  after  January  1  next  as  possible. 
Delay  followed  delay.  Lacking  a  material  budget,  many  officials  were  unable 
to  make  out  requisitions  which  were  either  accurate  or  adequate.  Many 
requisitions  described  what  was  wanted  so  meagerly  or  unsatisfactorily  that 
they  had  to  be  sent  back  for  correction.  The  idea  of  quarterly  contracts 
was  good  but  the  foundation  work  necessary  to  make  it  a  success  in  the 
Department  of  Water  Supply,  Gas  and  Electricity  had  not  been  laid  at  that 
time.  The  work  of  standardizing  supplies,  determining  stock  limits,  and 
preparing  a  material  budget  which  is  now  being  undertaken  by  the  Bureau 
of  Supplies  must  first  be  completed.  These  things  must  be  attended  to  as 
soon  as  possible,  for  the  near  future  will  demand  the  adoption  of  all  sound 
and  economical  methods  in  the  public  business. 

Bidding  for  Different   Classifications  Separately. 

Due  consideration  is  now  given  to  the  fact  that  manufacturers  and 
large  dealers  handle  goods  of  but  a  single  kind.  Therefore,  it  is  necessary, 
in  order  to  get  them  to  bid,  to  get  bids  separately  on  goods  handled  by  the 
different  trades. 

This  applies  not  alone  to  the  large  quarterly  contracts,  but  is  given  due 
consideration  in  those  small  (open  market)  orders  which  the  city  permits 
for  expenditures  up  to  $1,000,  and  which  are  made  necessary  by  various 
emergencies  that  may  arise  from  time  to  time.  A  recent  requisition  for  a 
particular  job  was  received  which  called  for  approximately  $500  worth  of 
valves  and  pipe  fittings,  a  box  of  candles  and  10  pounds  of  white  lead.  Had 
bids  been  requested  on  these  items  combined,  responses  would  only  have  been 
received  from  the  various  supply  houses,  whereas,  the  order  for  pipes  and 
fittings  was  sufficiently  large  to  attract  the  principal  dealers.  Candles,  which 
are  plumbers'  supplies,  and  white  lead,  which  is  regarded  as  a  painter's 
.supply,  would  have  prevented  them  from  bidding. 


47 


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Relative    Advantages    and    Disadvantages    of    Purchasing    Supplies   by 
"  Totals  "  and  by  "  Items." 

The  principles  governing  the  question  of  purchasing  supplies  are  unlike 
those  concerning  the  letting  of  contracts  for  work  to  be  done,  since  "  un- 
balanced bidding"  can  not  exist  where  the  quantity  of  material  bought  is 
the  same  as  that  bid  on. 

As  stated  before,  supply  contracts  should  be  so  drawn  that  goods  in 
different  groups  or  divisions,  as  determined  by  manufacturing  specialization 
or  trade  usage,  may  be  bid  on  separately;  for  if  orders  are  drawn  to  con- 
tain goods  of  different  classifications  the  bidders  will  be  "  middlemen  "  and 
'*  commission  merchants,"  not  the  makers  of  the  wares  nor  the  regular 
dealers  in  the  various  subdivisions  in  which  supplies  are  customarily  bought 
and  sold. 

These  "  middlemen  "  besides  adding  their  profits  to  the  manufacturer's 
price,  thus  increasing  the  cost  of  the  article,  are,  as  a  rule,  irresponsible 
parties  with  whom  it  is  most  unsatisfactory  to  do  business. 

Having  settled  the  point  that  goods  should  be  contracted  for  by  their 
respective  classifications,  the  question  arises :  Is  it  more  advantageous  to 
the  department  for  it  to  purchase  supplies  of  a  given  character  by  "  totals  " 
or  by  "  items."  The  matter  must  be  regarded  from  various  aspects. 

As  regards  price  two  cases  may  arise: 

First — Where  a  dealer  knows  that  the  entire  order  will  be  given  to  the 
man  making  the  lowest  "  total "  bid  he  quotes  a  wholesale  price  on  the 
whole  order. 

Second — On  the  contrary,  if  the  order  is  to  be  let  by  "  items,"  any  one 
dealer  may  obtain  but  a  single  item.  Facing  this  possibility,  no  sane  man 
makes  his  bid  on  each  individual  item  a  pro  rata  of  his  estimate  of  the 
wholesale  price  at  which  he  could  supply  the  entire  quantity  of  goods. 
Instead,  he  bids  a  retail  price  on  each  item  because  he  cannot  safely  do  other- 
wise. The  result  is  that  the  cost  to  the  Department  is  the  sum  of  the  lowest 
retail  prices  bid  on  the  various  items. 

I  have  devised  the  following  method  as  best  solving  the  difficulty : 

Require  the  bids  to  be  both  by  "  items  "  and  by  "  totals  " — in  which  case 
the  bidder  indicates  what  he  will  supply  anyone  of  the  items  for  separately — 
and  also  the  wholesale  price  at  which  he  will  furnish  them  all. 

Then  if  any  of  the  total  bids  are  less  than  the  sum  of  the  lowest  in 
dividual  bids  on  all  the  items  (as  they  probably  will  be),  the  contract  will  be 
awarded  to  the  maker  of  said  lowest  total  bid — otherwise  the  orders  will  be 
given  to  the  lowest  individual  bidders  on  each  of  the  separate  items. 

The  advantages  of  purchasing  supplies  by  "  totals,"  under  the  various 
classifications  are : 

1.  The  responsibility  concerning  the  quality  of  the  work  and  the  time 
of  completion  is  centered  and  easily  placed. 

50 


2.  The  work  of  the  Bureau  of.  Supplies,  of  the  Bureau  of  Audit  and 
Accounts,  and  of  the  departmental  inspectors  is  simplified  as  they  only  have 
one  party  to  deal  with. 

The  advantages  of  purchasing  supplies  by  items  are : 

1.  It  is  sometimes  advisable  to  purchase  in  small  quantities  in  order  to 
satisfy  local  supply  houses  who  are  incapable  of  handling  the  whole  order, 
but  are  desirous  of  having  a"  chance  at  part  of  it. 

2.  With  only  one  or  two  large  dealers  in  the  field  it  is  occasionally 
well  to  award  orders  by  items  in  order  to  develop  the  small  dealer  and 
promote  a  healthy  competition. 

If  the  awards  are  made  by  items,  the  best  firms,  wholesalers  and  manu- 
facturers frequently  will  not  bid,  as  the  orders  are  too  small,  making  the  cost 
of  handling  such  orders  more  than  the  profit,  as  may  be  seen  by  the  follow- 
ing figures : 

Orders  for  tools  issued  recently  on  a  public  letting :  92  orders  issued, 
total,  $706.06,  average  per  order,  $7.63.  Number  of  orders  for  amounts 
less  than  $5.00 — 65.  Number  of  orders  for  amounts  less  than  $1.00 — 23. 

It  is  impossible  for  bidders  when  making  their  bids  to  estimate  properly 
the  delivery  charges,  because  they  do  not  now  know  in  advance  whether  a 
delivery  will  amount  to  $1  or  $100,  or  whether  the  material  to  be  delivered 
will  be  a  small  package  or  a  truck-load  or  a  car-load. 

Furthermore,  the  cost  and  trouble  which  firms  are  at  present  put  to  in 
preparing  certified  checks  is  more  than  business  under  this  condition  is 
worth. 

If  the  successful  bidders  are  to  be  those  quoting  the  lowest  price 
for  individual  items,  many  firms  would  prefer  not  to  do  business  with  the 
City,  because  the  City  is  considered  by  them  a  consumer,  and  they  fear 
making  their  very  best  prices  to  a  consumer,  as  it  would  expose  their  methods 
of  doing  business  to  their  competitors.  Suppose  a  firm  should  be  in  a 
•position  to  make  a  particularly  good  price  on  an  article,  because  they  could 
purchase  the  merchandise  very  cheaply,  or  because  they  have  the  mer- 
chandise on  hand,  they  would  not  give  the  City  the  benefit  of  this  low  price 
unless  the  furnishing  of  this  article  would  carry  with  it  other  business. 

At  present  the  largest  and  best  firms  are  not  particularly  anxious  for 
City  business,  even  in  large  orders,  because  of  the  old  reputation  for  delay  in 
getting  payments,  the  difficulty,  nay  impossibility  of  making  adjustments  in 
price  to  cover  slight  irregularities  in  quantity  or  quality,  the  possibility  of 
rejection  by  the  Finance  Department  necessitating  replacement  and  rede- 
livery  ;  all  of  which  go  to  make  the  handling  of  this  business  both  expensive 
and  uncertain.  Furthermore,  the  security  checks  deposited  by  low  bidders 
are  retained  till  delivery  is  completed,  and  if  an  order  given  is  very  small, 
as  frequently  occurs  when  awarding  by  item,  the  security  check  may  be 
larger  than  the  order  received.  This  produces  an  unbusinesslike  condition, 

51 


as  it  necessitates  the  use  of  more  money  for  a  period  of  possibly  ninety  days 
than  the  actual  gross  amount  of  the  business  obtained. 

It  is  impossible  to  estimate  the  cost  to  the  City  of  awarding  the  small 
orders  by  items,  as  it  greatly  increases  the  num/ber  of  orders ;  and  when  the 
number  of  hands  through  which  these  orders,  accompanying  vouchers  and 
checks,  pass  in  this  and  the  Finance  Department  is  considered,  the  increased 
work  can  hardly  be  imagined. 

The  delay  in  the  splitting  up  of  the  business  by  items  is  also  a  material 
factor.*  This  delay,  of  course,  is  due  to  the  great  amount  of  labor  necessary 
for  canvassing  the  bids,  settling  the  tie  bids,  and  the  general  work  necessary 
in  the  case.  This  dela\  not  only  seriously  affects  and  retards  the  work  of 
the  Department,  'but  also  makes  it  very  difficult  for  the  successful  bidders  to 
accept  such  orders,  because  of  the  possible  changes  in  price  and  other  con- 
ditions which  may  take  place  in  the  interval  between  submitting  a  bid  and 
receiving  an  award.  Every  endeavor  is  now  being  made  to  reduce  this  to  as 
short  a  time  as  possible  and  great  progress  has  been  made. 

The  following  will  illustrate  the  attitude  of  (bidders  toward  the  matter. 
In  a  certain  bid  for  drafting  material  which  was  opened  in  this  office,  there 
were  five  bidders  tied  for  five  items.  When  the  representatives  of  these 
firms  met  in  this  office  to  settle  as  to  who  should  receive  these  awards,  they 
unanimously  decided  to  draw  lots,  the  lucky  man  to  get  all  the  items  on 
which  they  were  tied.  This  proved,  as  they  all  stated  on  this  occasion,  that 
they  did  not  care  much  about  items  individually  but  preferred  to  have  all 
or  nothing. 

Large  Competition. 

It  is  recognized  that  one  of  the  elements  most  likely  to  secure  low  prices 
is  an  active  competition  between  rival  dealers.  To  secure  this,  the  names  of 
possible  bidders  are  listed  under  the  heading  of  the  particular  class  of  goods 
in  which  they  specialize.  Before  making  purchases,  all  parties  making  the 
goods  in  question  are  notified  of  the  fact  by  letter  and  they  are  invited  to 
bid.  This  policy  of  publicity  has  been  very  successful  and  has  been  much 
appreciated  by  all  who  do  business  with  the  department.  It  has  resulted  in 
interesting  and  securing  bids  from  many  who  have  not  previously  made  any 
attempt  to  secure  City  work,  and  it  shows  to  all  men  that  the  contracts  of  the 
department  are  awarded  without  favor  and  to  any  party  qualified  to  do  the 
work  or  supply  the  materials  called  for. 

Purchasing  Standard  Materials. 

The  saving  in  price  due  to  the  purchase  of  standard  materials  has  already 
been  referred  to  under  the  heading  of  standardizing  specifications.  While 
the  exact  amount  of  this  saving  cannot  always  be  calculated,  it  is  known 
to  be  very  great. 

*  The  orders  on  the  public  letting  bids  which  were  opened  on  June  2d,  5th  and 
7th.  1912,  were  issued  on  July  18th,  19th  and  20th,  or  a  month  and  a  half  after  the 
bids  were  received*  i 

52 


How  Definite  Requirements  Affect  Prices.* 

It  is  a  noticeable  fact  that  where  the  specifications  are  indefinite,  the 
difference  between  the  lowest  and  the  highest  bids  is  very  great,  but  where 
the  requirements  to  be  met  are  clear  and  precise,  all  the  prices  are  about  the 
same. 

Reducing  Delivery  Charges. 

Since  the  cost  of  delivering  supplies  is  included  in  the  bid,  the  depart- 
ment immediately  profits  by  any  steps  which  can  be  taken  to  reduce  this  item. 

The  two  main  savings  have  been  affected  by : 

1.  Purchasing  large  quantities  at  one  time. 

2.  Reducing  the  number  of  delivery  points. 

1.  Up  to  a  certain  point,  the  larger  the  quantity  delivered  the  less  the 
unit  charge  for  crating,  shipping,  billing,  etc.,  becomes.     It  frequently  costs 
a  manufacturer  about  as  much  to  deliver  a  small  order  as  it  does  to  deliver 
a  large  one — while  the  office  expense  is  about  the  same  in  either  case.* 

2.  A  great  saving  has  been  effected  by  having  supplies  delivered  in 
quantity  at  some  central  storehouse.     Subsequent  delivery  of  small  quan- 
tities to  widely  scattered  and  often  inaccessible  points  being  made  by  the 
department   itself   with   auto   truck.     Where   this   is   done,   the   bid   price, 
chargeable  to  delivery,  becomes  very  small. 

Promptness  in  Awarding  Contracts. 

All  bids  are  publicly  opened  and  read.  However,  where  the  letting 
is  large  and  involves  a  great  number  of  items,  it  often  takes  quite  a  bit  of 
time  to  tabulate  all  the  prices.  The  work  is  expedited  so  that  the  low  bidders 
may  be  notified  and  awards  made  as  soon  as  possible,  for  delay  in  this  respect 
might  cause  loss  and  inconvenience  to  bidders  due  to  changes  in  prices  and 
market  conditions  in  the  interval. 

Prompt  Payment  of  Bills. 

Delay  in  paying  bills  does  more  to  discredit  a  department  with  con- 
tractors, to  discourage  many  of  the  best  firms  from  competing  for  city 
business  and  to  cause  those  who  do  bid  to  bid  high  in  self  defense,  than 
almost  any  of  the  other  iniquities  of  lax  and  inefficient  administration. 

On  the  other  hand,  a  reputation  for  fairness  and  promptness  in  meeting 
all  obligations  can  only  result  from  a  carefully  thought  out  business  pro- 

*  It  has  been  a  habit  when  purchasing  oil,  etc.,  to  state  that  "  deliveries  to  be  made 
as  needed."  This  affects  prices  as  it  costs  more  to  be  continually  delivering  small  lots 
than  it  does  to  make  one  delivery  of  the  entire  quantity.  Furthermore,  this  require- 
ment is  so  indefinite  that  no  contractor  could  estimate  his  delivery  charges  with  any 
degree  of  accuracy.  Under  it  he  might  be  called  on  to  deliver  a  barrel  at  a  time. 
Again,  each  delivery  means  a  separate  inspection  and  analysis  cost  the  Department 
about  $10  each. 

53 


cedure  where  system  rules  and  all  work  goes  forward  systematically  with- 
out halts  and  delays. 

Prompt  payment  of  bills  requires  prompt  inspections  and  a  method  of 
despatching  which  will  convey  these  reports  to  the  auditor  in  the  shortest 
possible  time  so  that  he  may  pass  the  bills  and  forward  them  to  the  Comp- 
troller for  payment. 

The  remarkable  results  achieved  by  the  present  administration  are  out- 
lined in  the  chapter  on  Inspecting. 

Square  Deal,  No  "  Hold-Up." 

Another  consideration  which  has  been  persistently  worked  for,  is  to 
systematize  all  procedure  so  that  honesty  and  fair  dealing  do  not  depend 
on  the  personalities  of  the  men  now  in  office  or  of  those  likely  to  come  into 
office  at  some  future  time,  but  that  the  laws  laid  down  for  carrying  on  the 
work  are  such  that  there  can  be  no  opportunity  for  unfairness  or  discrim- 
ination toward  any  one  doing  business  with  the  Bureau  of  Supplies.  All 
of  the  chapters  of  this  report  contain  detailed  descriptions  of  what  has 
been  done  in  this  respect. 

Witness  the  purchase  of  goods  under  such  definite  requirements,  that 
no  matter  who  gets  the  order  he  will  have  to  do  the  work  properly:  the 
elimination  of  adjectives  and  adverbs,  and  such  clauses  as  "  work-to-be-done- 
in-a-suitable  manner,"  or  "  to-the-satisfaction-of-somebody-or-other."  from 
specifications ;  the  publicity  given  to  all  lettings,  and  the  notices  thereof  sent 
broadcast  to  all  possible  bidders;  the  immediate  inspection  of  goods  upon 
their  delivery,  the  right  appeal  on  any  rejection,  the  privilege  of  a  re- 
inspection  by  a  different  inspector  when  goods  have  been  rejected ;  the  oppor- 
tunity of  being  present  when  one's  own  goods,  or  the  goods  of  any  com- 
petitor are  being  inspected,  or  analyzed  and  tested  in  the  laboratory. 

The  "pigeon-hole"  is  the  lair  of  graft.  Any  business  which  does  not 
keep  all  matters  constantly  on  the  move,  and  does  not  have  adequate  rec- 
ords to  show  the  progress  thereof  and  to  indicate  if  affairs  are  sidetracked, 
and  if  so  by  whom,  is  wrong  in  principle  and  in  practice. 

When  a  man  can  "  pigeon-hole  "  papers  and  then  wait  until  the  people 
interested  come  along  and  get  him  to  take  them  out  again,  that  man- 
well,  if  he  isn't  built  of  the  right  stuff,  he  may  be  subjected  to  temptation. 

Cost  Data. 

A  knowledge  of  costs  and  values  of  materials  is  of  vital  importance  to 
the  Chief  of  a  Bureau  who  employs  scientific  methods  to  obtain  low  prices. 

A  start  at  the  collection,  tabulation,  and  study  of  such  data  has  been 
undertaken  by  the  present  administration  of  the  Bureau. 

It  has  been  noticed  that  many  of  the  present  methods  of  purchasing  are 
fundamentally  wrong,  inasmuch  as  they  call  for  prices  for  supplies  where 
the  price  bid  must  include  several  different  and  unrelated  factors. 

54 


For  example :  In  purchasing  hydrants  the  Engineering  Bureau  has  been 
in  the  habit  of  estimating  the  number  that  would  be  required  at  the  various 
points  during  some  long  period  and  then  bids  were  requested  on  this  basis 
— delivery  to  be  made  from  time  to  time.  Sometimes  these  estimates  of 
the  relative  number  of  hydrants  required  at  the  various  points  are  incorrect 
and  it  then  becomes  necessary  to  take  hydrants  immediately  upon  their 
delivery  at  some  yard  and  cart  them  to  some  other  yard  far  distant.  This 
is  expensive. 

When  hydrants  are  contracted  for,  delivery  to  be  made  at  different 
yards  during  a  staled  period,  the  bids  should  state  a  price  for  the  hydrants 
F.  O.  B.  at  the  foundry  and  then  separate  delivery  charges  to  the  different 
yards  of  the  Department.  For  the  purpose  of  comparing  and  canvassing 
bids,  the  relative  number  to  be  delivered  at  each  point  will  be  assumed. 
This  is  subject  to  change,  however.  Contractors  will  be  directed  to  deliver 
their  goods  at  the  yard  where  they  are  needed,  and  actual  payment  therefor 
will  be  on  the  basis  of  the  F.  O.  B.  cost  of  the  article  plus  the  bid  price  for 
delivery  to  the  point  in  question. 

It  can  be  easily  seen  that  under  the  old  conditions  no  definite  analysis 
of  costs  could  be  made,  for  it  was  impossible  to  tell  what  proportion  of  the 
total  price  bid  was  for  the  hydrants  and  what  was  for  the  delivery.  When 
the  price  of  goods  and  the  costs  of  delivery  are  stated  separately  as  sug- 
gested, one  can  chart  all  seasonal  and  annual  changes  in  the  actual  cost  of 
goods,  and  one  can  further  grasp  the  expense  to  the  department  where 
conditions  made  deliveries  expensive.  It  is  on  such  data  that  improvements 
can  be  made. 

•  • 
Undesirable  Bidders  Should  Be   Eliminated. 

Since  all  purchases  are  advertised  in  advance  and  anyone  not  in  actual 
default  on  a  previous  contract  is  permitted  by  law  to  put  in  a  bid,  it  fre- 
quently happens  that  the  low  bidder  is  some  irresponsible  party,  of  a  type 
or  reputation  such  that  the  purchasing  agent  of  a  railroad  or  other  large 
corporation  would  absolutely  refuse  to  do  business  with  him.  They  are 
the  kind  of  men  who  "  do  business  on  a  shoe  string/'  who  have  their  "  office 
in  their  hat,"  or  at  best  rent  desk  room  somewhere,  and  whose  name  does 
not  appear  in  the  telephone  book.  They  often  stand  equally  willing  to 
bid  on  supplies,  to  write  you  a  life  insurance  policy,  to  rent  you  a  piece  of 
property  or  to  sell  you  a  book. 

When  an  order  is  awarded  them,  they  go  out  and  peddle  it  around  in 
the  hopes  of  getting  someone  else  to  furnish  the  supplies  or  do  the  work 
at  their  figure  and  give  them  a  small  commission  for  their  pains. 

Another  equally  undesirable  variety  is  the  irresponsible  individuals  or 
firms  who  bid  low  apparently  hoping  to  get  the  order  and  then  unload  a 
poor  grade  of  goods  on  the  city.  The  goods  are  inspected  and  rejected, 
considerable  time  elapses,  the  rejected  material  is  replaced,  the  replacement 

55 


is  inspected  and  in  turn  rejected,  and  so  it  continues  while  the  men  need- 
ing the  material  have  to  wait  and  wait  and  w-a-i-t,  and  the  interests  of  the 
city  suffer  in  consequence.* 

To  eliminate  this  undesirable  element,  all  bidders  should  be  required  to 
present  such  satisfactory  evidence  of  .their  financial  standing,  experience, 
shop  facilities  or  business  connections  that  it  is  evident  that  they  are  qualified 
to  receive  the  order  and  execute  it  according  to  its  terms  within  the  allow- 
able time  limit. 

Routine,  Supplies  and  Equipment,  t 

There  are  certain  classes  of  supplies,  of  which  it  is  necessary  to  pur- 
chase large  quantities  year  after  year.  Under  these  circumstances  there  is  a 
tendency  to  adopt  a  departmental  design.  For  instance,  a  city  determines  to 
have  its  own  special  hydrant.  Drawings  are  made,  detailed  specifications 
are  prepared,  and  manufacturers  requested  to  bid  in  accordance  therewith. 
What  is  the  result?  Whereas  before  many  independent  manufacturers  had 
bid,  they  now  hold  off,  for  the  cost  of  a  new  pattern  in  accordance  with  the 
special  City  design  must  be  reckoned ;  also,  it  is  a  (bothersome  matter.  The 
firm  getting  the  first  contract  has  a  substantial  advantage  in  subsequent  con- 
tracts, for,  having  the  patterns  on  special  machinery  needed,  they  can  under- 
bid all  other  competitors.  The  City  pays  the  difference.  For  this  it  has  the 
advantage  of  the  fewer  spare  parts  needed  to  be  kept  on  hand,  but  loses  such 
advantage  as  may  be  obtained  'by  getting  the  latest  commercial  article  with 
its  up-to-date  improvements.  Special  departmental  designs  tend  to  become 
obsolete,  and,  unless  the  City  owns  its  patterns  and  furnishes  them  gratis  to 
the  successful  bidder,  such  special  designs  are  expensive  luxuries.  In  fact,  it 
is  a  wise  maxim  to  "  let  the  seller  design  the  goods." 

The  purchase  of  equipment  or  new  machinery  introduces  additional 
problems.  There  is  a  tendency  at  the  present  time  to  purchase  machinery 
for  which  there  is  no  justification  on  the  score  of  economy  or  efficiency.  An 
automatic  ash-handling  device,  a  patented  stoker,  or  other  labor-saving 
machine  may  be  economical,  but  because  it  is  economical  in  one  situation 
does  not  mean  that  its  purchase  is  warranted  under  all  conditions.  The 
purchase  of  equipment,  whether  in  a  municipality  or  in  the  government 
service,  should  receive  the  same  careful  attention  and  care  as  is  accorded  by 
a  private  enterprise.  Whereas  the  City's  equipment  is  purchased  out  of 
corporate  stock,  revenue,  or  tax  levy,  the  economic  consideration  of  the 
problem  should  be  that  taken  by  the  private  corporations,  where,  to  obtain 
money,  bonds  must  be  sold  and  interest  paid  thereon. 

*  The  City  has  the  right  where  rejected  material  is  not  replaced  within  the  five 
days  allowed,  to  purchase  what  was  specified  in  the  open  market  and  charge  the  cost 
thereof  against  the  delinquent  contractor.  Often  this  is  not  a  feasible  remedy,  because 
the  goods  must  be  specially  made,  a  process  requiring  considerable  time. 

I  This  paragraph  is  an  extract  from  a  paper  by  the  author,  which  was  read 
at  the  first  meeting  of  the  Efficiency  Society,  held  in  New  York  City  March  18  and 

56 


The  depreciation  of  the  equipment  must  also  he  estimated,  and  the 
probable  cost  of  repairs  carefully  ascertained.  The  cost  of  operation  must 
also  'be  included  in  the  calculation.  The  automatic  ash-handling  machine 
dispenses  with  the  services  of  several  laborers,  but  requires  the  attention  of  a 
machinist.  The  device  also  requires  power  for  its  operation.  If  electric 
current  is  used,  it  must  be  paid  for;  if  steam  from  one's  own  boilers  is  used, 
coal  must  be  bought  and  burned  to  generate  it.  Furthermore,  the  fire 
insurance  rate  on  the  new  equipment  should  also  be  given  consideration. 

If  the  estimated  saving  simply  equals  the  interest  on  the  invest- 
ment, plus  depreciation,  plus  repairs,  plus  cost  of  operation,  plus  fire  in- 
surance, we  have  an  "  even  break/'  and  the  purchase  is  not  justified.  The 
difficulty  in  estimating  these  various  costs  makes  it  advisable  never  to  pur- 
chase any  new  equipment  unless  the  probable  saving,  plus  20  per  cent,  per 
annum  on  the  original  cost,  is  equal  to  or  greater  than  the  above-mentioned 
items.  This  is  not  properly  a  matter  which  comes  within  the  duties  of  the 
purchasing  department,  but  should  be  investigated  by  the  staff  division  of  the 
Engineering  Bureau  before  making  any  requisition. 


57 


CHAPTER  IV. 


INSPECTION   OF   SUPPLIES 

Purpose — Methods  followed — Reports.  The  inspection  of  work- 
manship and  material  embraced  in  construction  contracts 
is  attended  to  by  the  particular  bureau  for  whom  such 
work  is  being  done. 


The  purpose  of  inspection  is  to  make  sure  that  the  quantity  and  quality 
of  goods  delivered  correspond  with  what  was  called  for. 

In  the  days  before  there  was  a  storekeeping  system  and  when  practically 
all  supplies  were  delivered  direct  to  the  men  who  were  going  to  use  them, 
these  men  themselves,  in  many  instances,  made  whatever  inspection  was 
attempted.  Strange  to  say,  it  was  hard  to  overcome  this  way  of  doing 
things,  for  some  argued  that  no  one  knew  better  what  he  wanted  than  the 
man  who  ordered  the  goods,  therefore  no  one  was  better  fitted  to  inspect 
them.  Needless  to  say,  "  what  the  man  wanted  "  is  not  the  criterion  to  use 
in  passing  on  supplies.  Men  often  have  very  vague  ideas  concerning  what 
they  want,  and  many  requests  for  material  are  indefinite,  while  others  are 
actually  self  contradictory.  The  point  to  be  settled  is  whether  or  not  the 
Department  is  getting  exactly  what  was  described  by  the  specifications. 

When  the  work  of  inspection  was  done  by  many  men,  different  ideas 
existed  regarding  the  interpretation  of  specifications,  and  goods  that  one 
man  would  accept,  another  woul<l  reject.  In  order  that  the  same  standards 
might  prevail  everywhere  throughout  the  Department,  the  only  employees* 
now  allowed  to  pass  on  goods  are  the  trained  storekeepers  who  inspect  all 
-applies  delivered  at  storerooms,  and  the  inspectors  who  travel  around  and 
check  up  the  direct  deliveries. 

The  standardization  of  specifications  has  made  all  this  work  much 
simpler  and  easier.  Take  for  example  the  perplexing  problem  that  in  times 
past  confronted  an  inspector  when  looking  over  a  complicated  piece  of 
mechanism  at  some  out-of-the-way  pumping  station,  and  reference  to  the 
order  under  which  it  was  purchased  informed  him  that  it  was  to  be  X's  or 
"  equal  thereto."  It  has  been  pointed  out  under  the  head  of  "  Specification," 
that  making  a  decision  regarding  such  a  matter  is  most  difficult, 

*  Certain  supplies,  such  as  pipe,  special  castings,  etc.,  are  often  inspected  at  the 
point  of  manufacture  by  representatives  of  the  Bureau  which  will  use  the  goods. 

58 


especially  when  the  goods  offered  are  at  all  similar  in  grade  to  those  men- 
tioned as  a  standard.  Seldom  was  there  any  sample  of  the  "  standard  "  avail- 
able with  which  to  make  comparisons,  and  even  if  there  were,  how  was  an 
inspector,  not  himself  a  technical  man,  to  weigh  the  relative  points  of  excel- 
lence of  one  or  the  other?  Such  determinations  might  well  puzzle  experts 
in  tjie  particular  line  involved,  for  it  must  be  clearly  kept  in  mind  that 
"  equality  "  does  not  imply  "  similarity." 

There  is  a  rule  in  the  City  service  to  the  effect  no  agreement  can  be 
entered  into  whereby  goods  not  up  to  specifications  can  be  accepted  and  a 
suitable  reduction  made  in  the  price.  The  goods  delivered  must  be  exactly 
those  called  for.  It  often  happens  that  goods  are  not  either  in  whole  or  in 
part,  precisely  in  accordance  with  the  specifications,  though  for  all  practical 
purposes,  equally  suitable  for  the  use  to  which  they  are  to  be  put.  When 
this  happens  in  commercial  practice,  an  agreement  would  be  quickly  arrived 
at  between  the  buyer  and  the  seller,  the  shipment  would  be  accepted  and  a 
proper  deduction  made  in  the  bill.  The  City  cannot  do  this. 

On  the  other  hand,  where  there  is  some  slight  shortage  in  quantity,  the 
goods  are  accepted  and  a  pro  rata  reduction  made  in  the  payment. 

Long  and  uncertain  periods  used  to  elapse  between  the  delivery  of 
goods  and  a  report  of  their  inspection  reaching  the  auditor.  'Since  no  goods 
can  be  paid  for  till  they  have  been  accepted ;  and  quick  payment  of  bills  is 
one  of  the  ideals  now  being  striven  for,  every  effort  is  made  to  expedite  the 
work  of  inspection  in  order  to  attract  bidders  and  stimulate  competition. 

A  procedure  has  been  developed  for  doing  this  work  systematically  and 
with  the  least  likelihood  of  error  or  delay. 

Storekeepers  place  all  incoming  goods  in  an  "  inspection  cage  "  where 
they  remain  till  unpacked  and  checked  for  size,  quantity  and  quality.  If  the 
•determination  of  quality  requires  an  analysis,  a  sample  is  sent  to  the  labora- 
tory. Satisfactory  material  is  at  once  put  into  stock  and  rejected  material 
is  packed  up  for  return  shipment  and  put  in  a  separate  room  by  itself — and 
a  report  sent  to  the  central  office.  All  this  is  generally  done  the  same  day 
the  goods  are  received. 

The  new  policy  of  having  practically  all  goods  delivered  at  store  houses 
has  simplified  and  expedited  the  inspection  problem  to  a  remarkable  degree. 
However,  there  are  times  when  it  is  best  to  deliver  supplies  direct  to  the 
point  where  they  are  to  be  used  (lumber,  cement,  etc.).  This  is  particu- 
larly true  at  present  as  the  new  delivery  system  has  not  yet  been  put  in 
operation.  All  such  delivery  points  are  supplied  with  addressed  postals  on 
which  the  men  receiving  goods  are  directed  to  immediately  notify  the  central 
office  of  their  arrival. 

These  cards  are  sorted  by  a  clerk  who  checks  off  the  deliveries  on  the 
Record  of  Purchases.  The  cards  are  then  turned  over  to  the  inspectors  to 
show  them  what  points  to  go  to.  Formerly  there  was  no  system  in  making 
inspections,  inspectors  going  hither  and  thither,  in  a  most  obliging  but  ineffi- 
cient way.  Now  certain  territories  are  covered  on  certain  specified  days. 

59 


For  instance,  all  points  in  the  Croton  Watershed  reporting  stores  received 
are  visited  on  Mondays,  Manhattan  Borough  points  on  Tuesdays,  Brooklyn 
on  Wednesdays,  and  so  forth.  This  program  is  adhered  to  as  closely  as 
circumstances  will  permit.  As  the  cycle  is  completed  within  the  week,  the 
maximum  time  that  can  elapse  between  the  arrival  and  the  inspection  of  any 
duly  reported  direct  delivery  is  seven  days,  while  the  average  interval  is*  but 
three  and  a  half. 

Quite  a  change  from  the  days  when  dealers  stormed  into  the  office 
to  know  why  goods  delivered  weeks  before  had  not  'been  paid  for,  and  had 
to  be  told  it  was  because  no  one  had  been  around  to  inspect  them!  The 
average  time  which  it  used  to  take  to  make  a  report  on  material  is  estimated 
to  have  been  a  matter  of  weeks.  It  is  now  but  a  few  days  on  all  ship- 
ments not  requiring  a  laboratory  analysis.  No  wonder  in  the  old  days 
engineers  who  had  permitted  themselves  to  get  short  of  stock  used  materials 
before  they  were  tested,  and  suspicious  contractors  hinted  at  favoritism. 

The  old  and  the  new  channels  taken  in  reporting  inspections  are  as 
shown  on  opposite  page. 

Reports  on  Inspections. 

The  result  of  the  inspection  is  noted  on  the  Record  of  Purchases,  and 
the  Bureau  for  whom  the  goods  were  purchased  notified  of  the  result. 

If  the  goods  are  satisfactory  the  bills  are  certified  and  forwarded  to  the 
Auditor.  If  the  goods  do  not  meet  the  specifications  a  letter  is  written  to  the 
contractor  stating  in  detail  where  the  requirements  had  not  been  complied 
with,  and  he  is  directed  to  remove  the  rejected  material  and  replace  with 
proper  goods.  The  articles  to  be  replaced  are  entered  on  a  Record  of 
Replacement  and  treated  as  though  they  were  new  orders. 

When  rejections  are  objected  to,  the  contractor  is  given  a  hearing,  a 
re-inspection  (by  another  inspector)  is  accorded  him  if  requested,  and  no 
pains  are  spared  to  show  him  that  the  goods  failed  to  pass  on  their  merits. 


Charge  for  Re-inspections. 

The  Department  has  been  put  to  expense  by  reason  of  making  re-inspec- 
tions of  rejected  materials  and  inspections  of  goods  replacing  those  previously 
rejected.  To  cut  this  down  as  far  as  possible,  a  clause  is  inserted  in  all 
specifications  to  the  effect  that  a  charge  of  ten  dollars  will  be  deducted  from 
the  bill  for  any  re-analysis  of  a  rejected  material  (except  in  the  rare  instance 
that  the  previous  analysis  was  wrong)  and  for  each  and  every  analysis 
required  to  be  made  of  "  replacements." 

It  is  hoped  thereby  to  discourage  the  habit  in  dealers  of  challenging 
every  rejection  "  on  general  principles  "  and  that  other  most  reprehensible 
custom  of  first  delivering  poor  goods  or  a  poor  sample  in  the  apparent  hopes 
that  it  will  "  slip  through." 

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CHAPTER  V. 


STORAGE  AND   ISSUE 

Fixing  Stock  Limits— Care  of  Supplies — Equipment  of  Store- 
rooms— Rules  for  Storekeepers — Issues — Loans  and  Transfers 
of  Supplies — Subsidiary  Stores. 


\\hy  have  any  storerooms  at  all?  That  appears  to  be  a  rather  radical 
question,  yet  it  is  a  perfectly  fair  one  to  ask.  This  Department  got  along 
without  them  for  years.  Many  other  large  corporations  do  likewise.  It  is 
admitted  that  many  a  storeroom  is  of  little  value,  some  even  constituting  a 
very  positive  drain  upon  the  resources  of  the  organizations  which  maintain 
them.  Therefore,  why  have  storerooms?  Why  not  have  the  dealers  who 
furnish  supplies  deliver  them  all  direct  to  the  consumers  as  required? 

In  order  to  answer  these  questions  and  determine  what  type  of  store- 
room, if  any,  best  suits  a  given  condition,  it  will  be  necessary  to  analyze 
the  storage  problem  and  fix  its  advantages  and  its  limitations. 

Since  the  price  of  many  articles  fluctuates  greatly  during  the  course 
of  a  year,  it  should  be  a  purchasing  policy  to  "  stock  up  "  at  the  time  when 
goods  may  be  bought  most  cheaply.  A  storeroom  in  which  such  supplies 
are  kept  till  wanted  may  be  likened  to  a  "  storage  reservoir  "  in  a  water- 
shed where  the  abundance  of  the  spring  rains  are  collected  and  held  till  the 
period  of  summer  drought. 

Furthermore,  up  to  a  certain  point,  lower  prices  are  obtained  by  the 
purchase  of  large  quantities  at  one  time;  but  the  limit  of  wholesale  buying 
is  fixed  by  the  fact  that  keeping  stock  involves  loss  through : 

Interest  on  money  tied  up  in  unproductive  materials. 

Insurance  and  taxes. 

Deterioration. 

Cost -of  excess  storage  space. 

Cost  of  Supervision. 

These  conditions  therefore  determine  the  maximum  quantities  of  cur- 
rent supplies  which  can  be  profitably  stored. 

63 


On  the  other  hand  it  takes  time  to  obtain  or  replenish  stock  by  pur- 
chase, so  sufficient  supplies  for  current  consumption  must  be  carried  in 
order  to  tide  over  the  interval  required  to  get  more. 

Again,  it  is  much  cheaper  for  a  dealer  or  manufacturer  to  ship  a  large 
consignment  to  a  single  conveniently  located  storeroom  (for  subsequent 
local  distribution  by  the  department)  than  it  would  be  to  box  and  deliver 
the  same  supplies  in  various  small  quantities  at  numerous  different  points. 
All  delivery  charges  are  included  in  the  bid  prices  and  are  thus  ultimately, 
though  indirectly,  paid  by  the  City. 

A  central  storeroom  serving  a  large  number  of  consumers  acts  as  an 
"  equalizing  reservoir."  Its  stock  is  available  to  meet  their  varying  require- 
ments, and  this  makes  it  unnecessary  to  keep  large  quantities  of  material  at 
local  points,  for  it  is  much  easier  to  estimate  the  collective  needs  of  a  large 
number  of  isolated  stations  than  it  is  to  determine  their  individual  require- 
ments. 

Similarly,  emergency  equipment  held  in  reserve  at  a  central  point  is 
more  available  than  it  would  be  if  divided  up  pro  rata  among  many  local 
stations. 

The  most  economical  system  is  the  one  which  renders  prompt  and 
adequate  service  with  the  minimum  amount  of  money  tide  up  in  stock. 

Not  only  do  economical  purchasing  methods,  low  delivery  charges, 
prompt  inspections,  the  maintenance  of  adequate  emergency  reserves,  and 
the  ability  to  most  efficiently  supply  the  current  demands  of  many  different 
consumers,  all  require  the  accumulation  and  storage  of  stock  at  central 
points,  but,  furthermore,  experience  has  shown  that  such  materials  should 
be  exclusively  under  the  control  of  the  Bureau  of  Supplies.  It  is  now  con- 
ceded to  be  a  grave  error  in  organization  to  place  the  control  of  materials 
and  supplies  in  the  hands  of  the  men  who  are  to  use  them.  The  storage  and 
issue  of  supplies  have  therefore  been  put  upon  an  entirely  new  basis  dur- 
ing the  past  two  years. 

The  policy  has  now  been  adopted  of  concentrating  the  storage  of  the 
supplies  of  the  department  in  especially  equipped  storerooms  and  then  plac- 
ing the  care  and  operation  of  the  same  in  the  hands  of  trained  men.  These 
storekeepers  receive,  inspect,  store  and  issue  supplies;  they  keep  accurate 
records  concerning  the  goods  entrusted  to  them;  and  they  report  directly 
to  the  Chief  of  the  Bureau  of  Supplies.  It  is  at  last  recognized  as  incon- 
sistent to  keep  accounts  of  money  with  great  accuracy  and  then  when  the 
money  is  invested  in  stores  to  pay  no  attention  whether  they  are  used  or 
wasted. 

With  one  man  from  the  Bureau  of  Supplies  in  charge  of  these  storage 
points  responsibility  is  finally  definitely  located.  Even  if  this  arrangement 
had  increased  the  number  of  men  required  to  handle  stores — which,  by  the 
way,  does  not  appear  to  have  been  the  case — the  economy  in  consumption 

64 


and  the  diminution  of  waste  which  the  direct  control  has  effected,  has  far 
more  than  offset  any  such  increases.* 

Differences,  due  to  the  strict  enforcement  of  the  rules  regulating  the 
distribution  of  supplies,  are  always  to  be  anticipated  when  an  orderly  system 
takes  the  place  of  old  and  slip-shod  (less  efficient)  methods.  In  this  case 
they  were  easily  adjusted  as  they  arose. 

The  two  main  accomplishments  of  the  Bureau  of  Supplies  in  the  field 
of  Storage  and  Issue  have  been  in  proper  "  storekeeping "  and  effective 
"  accounting-control.''  The  fundamental  principles  thereof  have  been  formu- 
lated and  the  details  by  which  these  principles  could  best  be  adapted  to  the 
peculiar  conditions  of  the  department  have  been  studied  and  standard  prac- 
tice instructions  prepared  to  carry  them  into  effect. 

Storekeepers. 

Having  decided  that  the  men  in  control  of  supplies  should  not  be  those 
who  were  to  use  them,  it  became  necessary  to  organize  a  staff  of  store- 
keepers. An  endeavor  was  made  to  obtain  men  with  special  aptitude  for 
this  work.  As  the  men  were  appointed  they  were  assigned  to  the  179th 
Street  Storeroom.  This  was  the  first  central  storeroom  to  be  put  in  opera- 
tion and  it  was  utilized  as  a  training  school  for  all  the  new  men.  When  they 

*  As  additional  points  were  turned  over  to  the  Bureau  of  Supplies,  the 
previous  conditions  continued  to  reveal  themselves.  Disorder  and  confusion 
were  everywhere. 

Most  of  the  buildings  used  for  the  storage  and  handling  of  supplies  were 
in  bad  repair  and  unsuited  to  the  purpose. 

Stores  were  kept  in  a  large  number  of  different  places  and  were  not 
conveniently  located. 

Responsibility  for  the  care  of  supplies  was  not  centered  on  any  individual. 
There  were  no  inventories.  In  many  instances  men  were  permitted  to  remove 
supplies  without  making  any  record  of  what  they  had  taken. 

No  proper  bins  or  shelves  were  provided  for  many  classes  of  stores  and 
supplies. 

Stock  was  seldom  separated  into  those  articles  frequently  called  for,  and 
those  seldom  required. 

Stores  which  had  been  received  and  had  not  yet  been  inspected  were 
placed  in  the  same  room  with  goods  which  had  already  passed  inspection. 

Notices  of  rejection  were  not  sent  out  systematically. 

Goods  which  had  been  inspected  and  rejected  were  not  marked  in  any 
distinctive  manner  to  indicate  the  fact  nor  were  they  separated  from  regular 
stock. 

Supplies  were  poorly  taken  care  of  in  many  instances. 

Much  engine  packing  had  been  allowed  to  deteriorate ;  some  had  been  stored 
near  heat  and  dried  out— other  had  been  left  exposed  to  dirt  and  grit  and  could 
not  be  used.  Wire  inserted  packing  was  found  which  had  been  folded  and 
split. 

Rubber  mats  had  been  folded  and  split  by  other  weights  being  put  on 
them. 

Asbestos  pipe  covering  had  been  stored  horizontally,  so  the  upper  layers 
had  crushed  the  lower. 

Cement  (in  bags)  had  been  stored  under  leaky  roofs  and  in  cellars,  where 
it  was  ruined  by  water. 

At  one  point  the  men  from  an  adjoining  pumping  station  took  their  noon- 
day smoke  reclining  on  the  bales  of  cotton  waste. 

At  another  point  bales  of  cotton  waste  and  barrels  of  kerosene  were  kept 
in  the  same  room. 

Much  equipment  was  left  in  the  open  where  it  rapidly  deteriorated. 

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had  learned  the  details  of  the  new  system,  and  had  become  familiar  with 
the  stock,  the  methods  of  storing  it  and  the  preparation  of  the  various 
reports,  they  were  then  detailed  to  some  of  the  new  storerooms  which  have 
since  been  put  in  operation.  These  men  were  next  transferred  from  one 
storage  point  to  another  so  that  they  became  familiar  with  them  all.  Store- 
keepers thus  can  be  assigned  to  any  station  to  meet  any  emergency  or  press 
of  extra  work,  and  instead  of  being  unacquainted  with  their  surroundings, 
they  are  thoroughly  familiar  with  the  place,  the  stock  and  the  work  to  be 
done. 

Storerooms. 

Many  storekeeping  systems  require  the  location  of  the  central  store- 
r< nuns  close  by  the  shops  where  the  materials  are  to  be  used  or  repaired.  As 
the  water  department  does  not  use  stock  for  manufacturing  purposes,  and 
as  but  little  repair  work  is  done,  the  conditions  governing  the  locations  of 
<>ur  storerooms  were  convenience  for  delivery  and  facilities  for  distribution 
to  the  pumping  stations  and  repair  companies  to  be  served. 

Having  selected  a  location  for  a  storeroom,  it  became  necessary  to  fit 
it  up  for  the  work.  Many  of  the  old  buildings  previously  used  for  sup- 
plies were  so  unsuited  for  the  purpose  that  they  have  been  replaced  or 
abandoned  and  others  taken  in  their  stead.  One  of  the  essentials  for  proper 
care  of  materials  is  space.  Cramped  quarters  are  a  very  great  handicap 
to  efficiency,  for  there  must  be  plenty  of  room  for  expansion  of  stock,  for 
facility  in  handling  it  and  also  to  permit  of  proper  storage,  such  as  the 
separation  of  materials  on  the  basis  of  kind,  size  and  frequency  of  demand. 

The  design  of  the  old  bins  was  poor. 

1.  The  bins  were  too  high. 

\Yall  bins  only  should  be  built  to  a  height  requiring  step  ladders 
to  reach  the  upper  shelves.  Where  step  ladders  are  used  the  running 
or  "  trolley  "  type  is  to  be  preferred. 

F.\  en  where  liiirh  wall  bins  might  be  used,  it  is  generally  preferable 
to  use  a  low  bin  on  the  main  floor  and  then  put  in  a  gallery  to  carry 
a  -ecnnd  tier  of  bins. 

2.  The  bins  had  vertical  fronts  which  : 

Xarnnvs  the  aisle  space. 
I  b  )    Makes  dark  interiors. 

i  <• )  1  lad  upper  shelves  so  deep  that  it  was  difficult  to  reach  stock 
far  back  on  such  shelves. 

.\  The  added  depth  of  the  shelves  below  the  four- foot  level  was  very 
inconvenient. 

(a)    It  liold>  a  man  away  from  the  upper  shelves. 
(  /> )    It  restrict-  the  aisle  spare. 
( (*")    It  makes  the  lower  bins  dark. 

72 


PHOTO.     11.— OLD     STORAGE    BINS    AT    RTDGEWOOD. 

The  bins  were  too  high.  The  vertical  fronts  wasted  space.  The  shelf  at  the  four-foot  level  was 
inconvenient.  The  lower  bins  were  so  deep  that  it  was  impossible  to  reach  stock  at  the  back. 
The  stereotyped  design  of  shelving  not  suited  to  the  stock.  The  use  of  front  boards  was 
objectionable,  as  it  was  impossible  to  keep  the  shelves  clean. 


4.  The  lower  bins  were  so  deep  that  it  was  impossible  to  reach  small 
stock  at  the  back. 

5.  Where  all  bins  had  the  same  stereotyped  design  of  shelving  they  did 
not  lend  themselves  to  the  various  kinds  of  goods  carried  in  stock. 

<».  The  construction  of  the  old  bins  was  such  that  the  height  of  shelves 
and  the  width  between  vertical  partitions  could  not  be  readily  changed  to 
accommodate  the  different  sizes  of  goods  carried. 

7:     The  universal  use  of  front  boards  was  objectionable. 

(a)  They  made  it  practically  impossible  to  keep  the  shelves  clean. 

(b)  They  were  inconvenient  and  restricted  storage  space  where 
the  length  of  the  article  to  be  stored  exceeded  the  depth  of  the  shelf. 

(f)  They  made  it  hard  to  get  at  the  goods  behind  on  the  upper 
shelves. 

(d)  While  sometimes  permissible  in  lower  bins  where  loose  stuff 
(nuts,  bolts,  etc.)  were  kept,  front  boards  \vere  bad  for  "package  " 
stores  and  tools. 

The  new  bins  have  all  'been  built  with  sloping  fronts. 

1.  These  bins  are  of  such  height  that  a  man  standing  on  the  floor  can 
ra-ily  handle  stock  placed  on  top. 

2.  The  advantages  of  sloping  bins  are : 

(a]  They  give  better  light  to  the  interior  of  the  bins. 

(b)  They  are  more  accessible  as  they  can  be  climbed  like  a  ladder, 
(f)   They  give  more  alley  space. 

(d)  Upper  shelves  usually  have  small  package  goods  kept  on 
them.     These  goods  have  no  great  depth  and  do  not  require  a  deep 
shelf.    With  a  sloping  bin  having  shallow  upper  shelves,  these  goods 
are  more  easily  inspected  and  are  more  accessible. 

(e)  Weights  are  often  kept  at  the  front  edge  of  the  shelf.    With 
a  vertical  bin  this  tends  to  tip  the  bin  forward.     With  a  sloping  bin, 
the  weights  are  kept  nearer  the  back  of  the  bin,  and  gravity  tends  to 
hold  the  bin  in  place. 

Stores  Procedure — Inspections. 

When  goods  are  delivered  by  a  manufacturer  or  dealer  at  a  department 
>!nreroom,  they  are  put  in  a  separate  room  or  cage  and  kept  there  till  they  are 
inspected.  Except  in  rare  instances  of  some  special  or  unusual  supply,  the 
inspections  are  made  by  the  storekeeper  himself  the  day  the  goods  are  re- 
ceived. To  enable  him  to  do  this  work,  he  is  furnished  with  a  copy  of  the 
order  <»n  which  the  material  was  purchased  and  he  is  supplied  with  the  latest 
specifications.  If  in  doubt  concerning  the  acceptance  or  rejection  of  any 
nipplk-s  he  notifies  the  central  office  to  send  an  inspector  to  pass  on  it.  When 
goods  require  an  analysis  to  determine  their  quality,  the  storekeeper  imme- 
diately -ends  a  sample  to  the  laboratory  for  test. 

74 


PHOTO.     12.— NEW     DISTRIBUTING     STOREHOUSE— RIDGEWOOD. 
(Just  completed.     Stock  now  being  moved  in.) 

Low  bins  on  main  floor.  Gallery  carries  second  tier  of  bins.  Bins  have  sloping  front.  Individual 
bins  designed  for  the  stock  they  will  carry.  No  front  boards  used,  insuring  order  and 
cleanliness.  Adjustable  partitions  and  shelves. 


\Yhen  materials  are  rejected,  no  distinguishing  mark  is  put  upon  them 
to  prevent  their  being  mistaken  and  issued  as  good  stock,  for  such  mark 
might  prevent  the  contractor  who  supplied  the  goods  from  selling  them  to 
someone  else  later.  Instead,  it  is  found  to  be  best  to  take  all  rejected  mate- 
rials out  of  the  inspection  cage  and  place  them  in  a  room  by  themselves. 

\Yhen  goods  are  accepted,  they  should  be  marked  with  the  name  of  the 
department  (stencil  or  brand)  and  then  duly  entered  into  stock. 

There  is  now  much  second-hand  material  returned  to  stock  by  the 
operating  divisions.  This  material  should  be  passed  upon  by  a  Board  of 
Survey  (page  13).  Good  material  should  be  put  into  stock,  damaged  mate- 
rial worth  repairing*  should  be  repaired  at  once  and  then  put  into  stock, 
worthless  material  should  be  scrapped  and  disposed  of  at  the  first  opportunity. 

Storage. 

Printed  instructions  have  been  issued  to  storekeepers  for  the  purpose 
of  standardizing  the  best  practice  for  the  care  of  the  stock  and  the  transac- 
tion of  business.  The  following  are  examples : 

Rule  1.  Storekeepers  shall  report  for  duty  at  their  assigned  sta- 
tions at  8  A.  M.  and  remain  till  5  P.  M.  unless  otherwise  ordered. 
Saturday  the  closing  hour  will  be  1  P.  M.  Storerooms  will  be  closed 
on  Sundays  and  legal  holidays. 

Rule  2.  The  first  duty  of  every  storekeeper  shall  be  to  properly 
care  for  the  stock  entrusted  to  him. 

Rule  3.  Storerooms  must  be  kept  locked,  and  no  one  admitted 
unless  accompanied  by  storekeeper. 

Rule  4.     Every  endeavor  must  be  taken  to  protect  stock  from 
damage  by  improper  storage,  by  weather  or  by  fire. 
Rubber  goods  must  be  kept  away  from  heat. 
Rubber  boots  and  coats  must  be  unpacked  and  hung  up. 
Packing  must  be  kept  from  damage  by  heat,  grit,  dirt,  etc. 
Cement  must  be  kept  away  from  all  moisture. 
Lumber  must  be  protected  from  the  weather. 
The  exposed  surfaces  of  valves,  fittings,  hydrants,  etc.,  should 
be  protected  where  they  are  kept  in  the  open,  and  all  bright  or 
machine  surfaces  (threads,  valves,  etc.)  should  be  adequately  pro- 
tected by  coatings  of  oil,  white  lead  or  machinery  slush. 

Fire  extinguishers  must  be  kept  filled  and  properly  tagged. 
Buckets  of  sand  must  be  kept  near  the  door  in  all  rooms  where 
oils,  gasoline,  etc.,  are  stored. 

*  Standard  practice  instructions  concerning  the  care  and  storage  of  second-hand 
fittings  which  it  is  proposed  to  use  again  state :  "  Fittings  should  be  put  in  repair  as 
soon  as  possible  after  they  arrive  at  the  yard  and  before  they  are  returned  to  stock. 
They  should  be  cleaned  of  scale  and  rust  (possibly  by  sand  blast  or  by  the  use  of  wire 
brushes)  ;  they  should  then  be  painted  and  all  '  bright '  or  bearing  surfaces  protected 
by  oil  or  white  lead." 

76 


No  accumulations  of  rubbish,  excelsior  or  wrapping  paper 
shall  be  allowed  in  any  storeroom. 

All  oil  rags  or  waste  must  be  kept  in  a  covered  metal  con- 
tainer when  not  in  use. 

Xo  smoking  shall  be  allowed  in  storerooms. 

Rule  5.  Storerooms  must  be  kept  clean  and  in  perfect  order 
at  all  times. 

No  stock  or  materials  shall  be  left  lying  around. 
No  goods  shall  be  allowed  to  block  the  aisles. 

Rule  6.  All  stock  delivered  to  stores  must  be  unpacked  and  in- 
spected at  once.  If  the  nature  of  the  material  requires  an  analysis,  a 
sample  must  be  sent  to  the  laboratory.  If  the  storekeeper  is  not 
familiar  with  any  such  stock  he  must  notify  the  Chief  of  the  Bureau 
and  an  inspector  will  be  sent  to  pass  upon  it. 

Rule  7.  As  soon  as  goods  are  inspected  the  result  must  be 
reported  to  the  Chief  of  the  Bureau. 

(a)  If  the  goods  are  accepted  they  will  be  marked  with  the 
name  of  the  department  and  at  once  entered  into  stock.    The  stock 
cards  will  be  altered  and  the  quantity  entered  upon  the  "  Stores 
Received  "  Sheet.     The  bills  will  be  marked  O.K.  and  forwarded 
to  the  central  office. 

(b)  If    goods   are    rejected   they    will   be   removed    to   the 
"  rejected  material  "  room  and  the  fact  reported  to  the  Chief  of 
the  Bureau  of  Supplies  on  the  regular  form. 

Rule  8.     All  goods  of  like  character  shall  be  stored  together. 

In  the  pipe  yards  where  supplies  and  spare  parts  are  carried 
boards  will  be  constructed  for  each  type  of  hydrant  and  valve. 
On  each  board  will  be  tacked  the  various  parts  constituting  the 
mechanism  of  said  hydrant  or  valve.  Over  each  part  will  be  sten- 
cilled a  number,  which  will  correspond  to  the  number  of  the  bin 
containing  the  stock  of  the  parts  in  question. 

This  will  do  away  with  the  necessity  for  a  man  looking  through 
a  large  number  of  cubby-holes  for  the  piece  he  wants,  "  pawing  " 
over  a  quantity  of  stock  in  the  process.  Instead,  before  he  goes 
to  the  bin  he  will  identify  the  piece  he  requires  by  looking  on  the 
stock  board. 

Store  Cards — Perpetual  Inventories. 

A  card  is  made  out  for  every  class  and  size  of  stock.  These  store  cards, 
besides  describing  the  articles,  give  their  location  in  the  storeroom,  their 
unit  price,  and  the  dates  and  amounts  of  all  receipts  and  issues.  They  thus 
constitute  a  "  perpetual  inventory  "  and  show  at  all  times  the  quantity  and 
value  of  the  stock. 

77 


Inventory. 

The  Bureau  of  Supplies  started  the  first  inventory  ever  taken  of  the 
supplies  of  the  Department.  The  count  of  the  stock  in  the  main  storerooms 
was  the  first  authoritative  list  giving  the  nature,  amount  and  location  of  the 
stock  owned.  The  card  index  above  referred  to  acts  as  a  perpetual  inven- 
tory. It  is  planned,  however,  regularly  to  count  all  stock  in  storerooms  at 
least  twice  a  year.  This  will  be  a  check  and  will  show  all  the  small  mis- 
takes which  have  crept  into  the  card  record.  But  few  discrepancies  are  an 
indication  of  the  efficiency  of  the  storekeepers,  although  they  do  occur  even 
with  the  greatest  care;  the  "  shorts  and  overs  "  so  found  are  taken  care  of 
on  adjustment  blanks. 

Consumable  and  Non-consumable  Supplies  Compared. 

Supplies  should  be  divided  into  two  classes ;  consumable  and  non-con- 
sumable. Fuel,  oils,  waste,  packing,  paint,  and  lumber  are  examples  of  the 
first  class;  whereas  tools,  implements,  harness,  rubber  boots,  belong  to  the 
second  group.  It  should  be  arranged  as  soon  as  possible  that  none  of  the 
"  non-consumable  "  supplies  be  issued  till  those  they  are  to  replace  have  been 
turned  in.  Thus  a  man  does  not  get  a  new  saw  until  he  returns  the  old 
one  and  shows  that  it  has  been  worn  out.  He  does  not  get  a  new  pair  of 
rubber  boots  until  he  returns  the  old  ones  and  is  able  to  demonstrate  that 
they  have  rendered  the  most  service  that  was  in  them.  This  not  only  gives 
the  purchasing  division  an  opportunity  to  inspect  the  goods  after  use  and 
ascertain  what  service  they  gave,  but  it  prevents  departmental  property  being 
used  for  personal  purposes  or  sold  for  profit,  or  so  carelessly  guarded  and 
protected  after  issue  that  it  is  either  lost  or  stolen. 

Issues. 

When  material  has  been  returned  to  stock  it  is  to  be  re-issued  before 
regular  stock.  To  prevent  loss  from  depreciation,  all  other  supplies  should 
be  issued  in  rotation,  for  when  stores  are  given  out  in  the  order  in  which 
they  are  received,  no  old  material  is  left  on  the  back  of  the  shelf  to  deterio- 
rate and  subsequently  be  thrown  out. 

The  difference  between  a  central  storeroom,  which  is  part  of  a  general 
stores  system,  and  a  local  stock  room,  should  be  clearly  understood.  To  be 
effective  the  stores  system  should  be  a  wholesale  proposition.  Continual 
application  to  storekeepers  for  a  bit  of  this  or  that  is  bad  business  for  many 
reasons. 

1st.  Every  time  a  man  goes  to  stores  for  stock  it  takes  his  time 
going  and  returning.  A  continual  running  back  and  forth  is  not  only 
wasteful  of  time,  but  indicates  that  the  employee  is  so  poorly  versed 
in  the  work  he  has  to  do  or  is  so  careless,  that  he  does  not  keep  suffi- 
cient stock  close  at  hand. 

78 


MONEY   VALUE   OF   STOCK  AT   STORAGE   POINTS   UNDER 
THE  BUREAU  OF  SUPPLIES. 


160,000 
150,000 
140,000 
130,000 
120,000 
110,000 
100,000 
90,000 
60,000 
70,000 

-  60,000 

•  50,000 

-  40,000 

•  30,000 
20,000 


2d.  Every  time  a  storekeeper  is  called  on  to  fill  a  requisition 
a  certain  amount  of  his  time  is  consumed,  not  only  in  getting  the 
goods  off  the  shelf,  but  in  altering  his  stock  card  and  making  out  the 
"  stores  issued "  report  for  the  Central  Office.  Time  thus  taken 
would  otherwise  have  been  spent  in  caring  for  the  stock  on  hand. 

3d.  Every  time  an  article  is  issued  from  a  storeroom  a  corre- 
sponding change  has  to  be  made  in  the  ledgers  in  the  stores  control 
office.  The  fact  must  also  appear  on  all  records  affecting  materials 
issued  from  stores  and  received  by  employees.  Annual  and  quarterly 
reports  of  stock  issued  are  now  largely  composed  of  a  multitude  of 
small  items  of  this  sort.  The  extra  amount  of  bookkeeping  which 
this  entails  is  beyond  measure  and  entirely  unnecessary. 

Local  Stock  Rooms. 

Local  stock  rooms  should  contain  such  supplies  and  materials  as  are  in 
current  demand  and  there  should  be  sufficient  quantities  to  last  a  month. 
The  man  having  the  key  to  this  room  is  generally  the  man  using  the  goods. 
He  gets  a  quantity  of  goods  at  the  first  of  the  month,  which  is  supposed  to 
suffice  till  the  next  supply  arrives.  As  he  needs  a  bit  of  waste,  a  piece  of 
packing,  a  plank  or  a  handful  of  nails  he  takes  them.  All  that  is  necessary 
to  account  for  small  local  stock  issues  is  to  subtract  what  is  left  at  the  end 
of  the  month  from  what  was  on  hand  at  the  beginning.  To  this  should  be 
added  any  emergency  supplies  or  other  "  direct  deliveries."  On  the  other 
hand,  to  figure  local  consumption  day  by  day  is  often  a  waste  of  time.  It 
bothers  the  poor  man  who  uses  the  material.  It  makes  work  for  a  lot  of 
clerks  at  the  central  office  which  costs  in  salaries,  and  it  is  of  little  use  in 
promoting  economy  or  efficiency. 

Storekeepers  are  furnished  with  the  names  of  those  authorized  to  draw 
supplies,  also  the  locations  of  all  subsidiary  stock  rooms  to  be  supplied.  No 
storekeeper  can  draw  a  requisition  on  himself  for  supplies.  All  stock  in 
storerooms  is  held  in  trust  for  the  division  out  of  whose  funds  it  was  pur- 
chased. If  a  storekeeper  wants  mops,  brooms  or  other  implements  for 
carrying  on  his  work  they  must  be  purchased  for  him  and  charged  up  to 
appropriations  especially  allowed  for  that  purpose. 

All  material  going  out  of  storerooms  is  not  issued  for  consumption. 
Some  is  loaned  and  some  is  transferred  to  other  storerooms  to  be  issued  by 
them. 

Loans. 

It  frequently  happens  that  the  work  of  the  city  can  be  expedited  by 
loaning  a  few  lengths  of  pipe,  a  valve  or  some  other  equipment  to  a  con- 
tractor who  has  a  city  contract  but  whose  work  is  held  up  because  he  is 
unable  to  get  supplies  from  his  foundry.  The  material  thus  loaned  is  re- 
placed by  the  contractor  with  similar  stock  at  the  earliest  moment. 

80 


Transfers. 

Transfers  are  something  to  be  reduced  to  a  minimum.  They  are  costly 
and  indicate  an  incorrect  distribution  of  supplies  in  the  first  instance.  Maxi- 
mum and  minimum  stock  limits  will  do  away  with  this.  They  are  necessary, 
however,  to  meet  emergencies. 

Regarding  transfer  of  supplies  from  one  borough  to  another:  At  the 
beginning  of  the  present  administration  there  was  no  record  at  any  central 
point  of  the  supplies  to  be  found  in  any  one  of  the  five  boroughs ;  conse- 
quently transfers  from  one  point  to  another  could  not  be  made  except  by 
communicating  with  the  different  yards  to  see  from  which  one  the  desired 
material  could  be  obtained.  Under  the  new  system  there  is  a  record  in  the 
stores  control  office  giving  the  supplies  in  all  the  central  storerooms,  and  by 
consulting  such  record  the  transfers  can  easily  be  made. 

Distribution. 

The  practice  of  having  manufacturers  and  dealers  make  direct  deliveries 
to  local  consumers  should  be  stopped  except  in  cases  of  emergency.  All 
material*  purchased  on  Open  Order  or  Contract  should  be  delivered  at  the 
central  storeroom  supplying  the  point  to  which  the  supplies  are  ultimately 
going.  The  supplies  should  be  unpacked  and  inspected  by  the  storekeeper, 
and  then  recrated  by  him  and  forwarded  to  their  destination  by  depart- 
mental auto  truck. 

Definite  steps  should  be  taken  to  provide  adequate  facilities  for  making 
deliveries  of  supplies  from  storerooms  to  points  of  consumption.  A  truck 
should  be  assigned  to  the  different  storerooms  on  certain  days  each  week  to 
make  these  local  deliveries.  The  trucks  used  for  this  purpose  would  also 
serve  to  get  men  and  supplies  to  any  place  where  they  might  be  needed  to 
meet  an  emergency.  Considering  the  long  distances  to  be  covered  in  this 
service,  the  auto  truck  is  ideal.  Among  its  advantages  as  contrasted  with 
horse-drawn  vehicles  are : 

1.  Better  speed  in  reaching  emergency  points. 

2.  Greater  carrying  capacity  for  both  men  and  material. 

3.  Less  space  for  storage  both  of  vehicle  and  motor  at  the  yards. 

4.  The  convenience  of  having  power-driven  windlasses  on  the 
track,  particularly  for  unloading  and  lowering  into  trenches. 

5.  Superior  economy,  because  no  expense  is  incurred  when  the 
truck  is  not  in  use. 

6.  Diminished  number  of  men  needed  as  hostlers,  for  equal  or 
greater  capacity  as  compared  with  horses. 

7.  No  delay  from  prostration  of  horses  in  summer  heat. 

8.  Less  interference  in  winter  from  snow  in  streets. 

*  Except  coal,  lumber,  heavy  castings  large  shipments  of  cement  and  material  of 
like  nature  which  is  bulky  and  expensive  to  load  and  unload. 

82 


CHART    SHOWING    DISTRIBUTION    SYSTEM    OF    SUPPLIES 
FROM  GENERAL  STORES  TO  ULTIMATE  CONSUMERS. 


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fewer  trucks  are  needed. 

10.     A  superior  sanitary  cleanliness  at  the  yards. 

Stock    Limits. 

It  has  'been  pointed  out  that,  whereas  an  oversupply  of  stock  in  store- 
house is  a  needless  expense,  an  inadequate  one  is  fatal  to  the  efficient  carry- 
ing on  of  the  work  of  the  department,  and  it  becomes  an  absolute  menace 
when  the  reserves  get  so  low  that  there  is  not  sufficient  material  on  hand  to 
meet  the  demands  of  any  emergency. 

The  problem  of  fixing  stock  limits  should  begin  with  the  consumers. 
To  do  away  with  unnecessary  or  excessive  local  reserves,  the  following  lists 
should  be  made  for  each  point  (repair  company,  pumping  stations,  etc.) 
where  supplies  are  used: 

(a)  Emergency  equipment. 

(b)  Engine  spare  parts. 

(c)  Tools  and  implements. 

.  (d)   Current  supplies  and  equipment  required  per  month  for  op- 
eration and  maintenance. 

An  inspection  of  each  point  should  be  made  and  it  should  be  seen  to 
that  all  the  above  articles  are  on  hand. 

All  surplus  tools,  all  over-equipment  and  all  equipment  not  available 
for  the  engines  in  use  at  the  stations  where  it  is  stored,  should  be  immediately 
returned  to  the  central  stores. 

Some  stations  were  carrying  supplies  and  equipment  (gaskets,  packing, 
spare  parts,  etc.),  for  apparatus  and  pumps  no  longer  in  use,  and  in  other 
cases,  supplies  were  carried  for  machines  which  had  long  since  been  removed 
to  some  other  station  or  sold  for  junk.* 

All  supplies  left  for  use  must  be  in  good  condition  and  available  for 
immediate  service. 

All  supplies  and  equipment  left  at  local  points  should  be  branded  or 
otherwise  suitably  marked  to  indicate  that  it  is  departmental  property. 

A  classified  inventory  of  all  such  supplies  should  be  prepared  and  fur- 
nished to  the  man  in  charge  of  the  station.  Thereafter  he  should  be  held 
responsible  for  their  safekeeping.  At  the  end  of  each  month  he  should 
submit  a  list  of  stores  used  which  should  be  checked  against  the  inventory 
and  the  deliveries  and  will  be  used  in  computing  operating  costs. 

Supplies  constituting  emergency  equipment  should  'be  gathered  together 
in  one  room.  They  should  be  sorted,  classified,  and  so  arranged  that  they 
can  be  obtained  instantly  when  needed. 

*  One  storekeeper  reported  that  surplus  stock  sent  to  his  storeroom  from  local 
pumping  stations  contained  566%  pounds  of  packing  (worth  about  $500)  which  did 
not  fit  any  equipment  in  the  Borough  where  it  was  found. 

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All  engine  spare  parts  should  be  gone  over  to  see  that  they  are  in  proper 
condition  and  steps  should  be  taken  to  keep  them  so.  (Bright  surfaces 
should  be  coated  with  "  machinery  slush,"  bearing  surfaces  protected,  etc.) 

All  tools  needed  at  the  stations  should  be  arranged  on  boards  conveniently 
located  about  the  plant.  Under  the  hooks  on  which  the  various  tools  are 
hung  when  not  in  use,  should  be  painted  in  red  the  outline  of  the  tool.  Thus 
a  glance  at  any  tool-board  would  suffice  to  show  what  tools  are  in  use  or 
missing. 

Implements  should  have  stenciled  on  them  the  place  where  they  belong. 
Thus  wheelbarrows  may  be  marked  "  boiler-room,"  ladders  marked  "  paint- 
shop,"  tools  marked  "  Wagon  No.  1."  This  prevents  misplacement  and 
puts  a  check  on  indiscriminate  borrowing. 

Current  equipment  should  be  kept  by  itself.  Its  storage,  arrangement, 
inspection  and  issue  should  be  governed  by  special  rules. 

Stock  Limits  in  Central  Stores. 

Next,  having  decided  what  consumers  should  be  supplied  from  any 
given  central  storeroom,  the  sum  total  of  their  monthly  requirements  should 
give  the  average  monthly  business  of  that  storeroom.  Using  this  as  a  basis 
it  will  be  a  comparatively  simple  matter  to  determine  the  proper  amounts 
of  each  of  the  various  items  to  keep  on  hand.  To  this  must  be  added  such 
accumulations  of  stock  as  are  made  from  time  for  new  work,  alterations  or 
other  improvements. 

Combining  the  annual  requirements  of  the  central  or  distributing  store- 
rooms will  give  the  needs  of  the  department  for  standard  supplies  for  a 
year.  This  total  is  the  basis  for  a  Supply  Budget  on  which  the  yearly  re- 
quest for  funds  can  be  estimated  and  defended.  The  fluctuations  in  the 
demand  for  supplies  will  indicate  the  proper  purchasing  policy  to  be  put  in 
force. 

A  constant  endeavor  is  being  made  to  substitute  a  proper  routine  for 
the  present  haphazard  way  of  drawing  stock  from  storerooms.  Requisitions 
are  continually  coming  in  for  waste,  packing  or  pig  lead,  generally  accom- 
panied by  a  note  to  the  effect  that  the  sender  is  all  out  of  that  particular 
article  and  must  have  some  at  once.  The  Bureau  of  Supplies  does  not  have 
the  ordering  of  material  in  the  first  instance ;  it  often  happens  therefore  that 
the  central  storeroom  itself  is  all  out  of  the  material  so  urgently  needed.* 

It  is  this  condition  of  affairs  that  leads  to  so  much  material  being  pur- 
chased direct  by  the  various  Bureaus  marked  "  Confirming  Verbal  Order  " 
— "  For  Emergency." 

The  proper  solution  of  the  difficulty  would  be  to  have  all  men  who  use 
supplies  take  count  of  their  local  stock  at  the  first  of  each  month,  and  make 

*  To  prevent  this  a  letter  is  sent  every  week  to  the  different  Borough  Engineers, 
giving  a  list  of  articles  which  have  been  called  for  at  storerooms  and  which  are 
completely  out  of  stock.  An  asterisk  indicates  items  previously  reported  as  being  out. 
To  this  list  is  added  another  of  items,  the  stock  of  which  appears  to  be  far  too  low. 


out  a  requisition  on  stores  for  such  articles  as  will  be  required  to  carry  them 
through  the  month.  This  would  develop  forehandedness  and  would  result 
in  orders  for  additional  stock  being  sent  to  storerooms  in  advance  of  the  time 
when  it  is  urgently  needed. 

Conclusions. 

The  method  of  permitting  the  Supply  Bureau  only  to  purchase  supplies 
when  and  in  quantities  specified  by  other  bureaus  has  been  tried  and  found 
wanting.  It  is  a  question  which  has  been  the  greater — the  foolish  ordering 
and  purchasing  of  material  not  needed,  or  the  urgent  demands  on  the  store- 
houses for  materials  which  certain  officials  have  failed  to  provide. 

The  probable  requirements  of  all  consumers  for  current  supplies  hav- 
ing been  determined,  the  Bureau  of  Supplies  should  be  directed  to  purchase 
the  same,  and  to  keep  the  central  storerooms  at  all  times  so  stocked  with 
standard  supplies  that  current  requisitions  can  be  filled  on  sight. 

Naturally,  materials  for  special  purposes  must  be  ordered  in  advance 
by  the  parties  requiring  them. 

Much  of  the  foregoing  cannot  now  be  carried  out  because  the  true  func- 
tion of  a  Bureau  of  Supplies  has  not  yet  been  fully  realized  and  the 
Bureau's  authority  extended  to  include  this  service. 

To  obtain  the  best  advantage  of  a  proper  storekeeping  system,  the  Chief 
of  the  Bureau  should  be  in  close  touch  with  all  the  activities  and  aims  of  the 
Department,  and  his  Bureau  should  not  merely  purchase,  inspect,  store  and 
issue  supplies,  properly  and  economically,  but  it  should  see  that  a  proper 
stock  of  current  requisites  and  of  emergency  supplies  are  always  on  hand 
and  that  articles  purchased  are  necessary  and  are  those  best  suited  for  the 
purpose  to  which  they  are  to  be  put.  It  should  further  ascertain  that  the 
supplies  are  actually  used  as  intended,  and  finally  when  they  have  ceased 
to  be  of  service  should  see  that  they  are  surrendered  to  it  for  salvage  or 
sale  as  scrap. 


CHAPTER    VI. 


RECORDS  AND  STATISTICS 

Information  required  for  proper  accounting  control — The  collec- 
tion of  data  and  the  preparation  of  charts  and  diagrams.* 


In  the  Bureau  of  Supplies,  as  in  all  business,  it  is  necessary  to  keep 
records  and  prepare  statistics — the  nature  and  extent  of  these  records 
and  the  character  and  use  to  be  made  of  these  statistics  vary,  however, 
with  every  undertaking.  For  that  reason  it  is  impracticable  to  impose  the 
records  of  one  business  upon  another  unless  both  are  identical  in  all 
respects. 

The  various  functional  activities  of  the  Bureau — purchasing,  inspect- 
ing, storage  and  issue — were  carefully  considered  in  order  to  ascertain 
what  information  was  necessary  for  honest  and  efficient  administration. 
It  was  next  determined  how  this  information  was  to  be  obtained,  and 
the  use  to  be  made  of  it. 

Purchasing  Records. 

Requisitions  for  the  purchase  of  goods  used  to  be  made  on  a  variety 
of  blanks,  on  odd  pieces  of  paper  and  even  by  word  of  mouth.  In  place 
of  all  this,  two  regular  forms  were  substituted,  one  for  open  orders  and 
one  for  contracts.  When  filled  out  they  show  what  is  wanted  and  the 
estimated  cost,  where  it  is  to  be  delivered,  the  use  to  which  it  is  to  be 
put,  the  date  it  will  be  needed,  and  a  statement  signed  by  the  man 
ordering  the  goods  and  certified  to  by  his  bureau  superiors  that  the 
materials  so  ordered  are  for  the  use  of  the  City  and  are  necessary. 
These  requisitions  are  then  investigated  to  see 

First — If  the  goods  can  be  supplied  from   stock  on  hand  in 

storerooms. 

Second — If  there  is  any  already  ordered. 
Third — If  the  quantity  appears  to  be  correct. 
Fourth — If  the  quality  appears  to  be  right  for  the  use  intended. 
Fifth — If  there  is  a  department  specification  for  the  goods,  and 

if   not,  whether  the   requisition   clearly   describes   what  is 

wanted. 


*  Many  of  the  new  forms  were  designed  with  the  aid  and  assistance  of  the  Bureau 
of  Municipal  Research,  New  York  City. 

91 


The  determination  of  these  matters  called  for  a  perpetual  inventory 
of  goods  on  hand,  so  that  was  arranged  for  under  the  storage  records. 

Forms  were  then  prepared  which  greatly  facilitated  the  work  of 
making  the  purchases;  and  a  ledger  was  started  to  show  the  state  of 
forwardness  of  any  contract,  whether  with  the  Corporation  Counsel  or 
with  the  Comptroller,  or  with  the  "  City  Record "  for  printing.  Its 
records  of  the  dates  when  papers  were  sent  and  when  returned  furnished 
the  data  for  that  most  interesting  and  instructive  diagram  (page  30 ), 
which  accounts  for  the  time  taken  in  letting  a  contract. 

The  purchasing  records  also  show 

What  has  been  bought. 
For  whom  it  was  bought,  and 
The  cost. 

Inspection  Records. 

A  ledger  was  recently  begun  to  show  whether  goods  ordered  have  been 
delivered,  if  so,  whether  they  have  been  inspected,  and  if  inspected,  the 
result.  If  goods  are  rejected,  the  contractor  is  notified,  the  date  of  replace- 
ment noted,  the  time  required  to  reinspect  recorded,  and  whether  the  goods 
passed  or  failed  to  pass.  All  these  facts  are  put  down  and  used  as  required, 
to  follow  up  orders  and  receive  prompt  deliveries,  to  expedite  inspections 
and  check  up  the  work. 

Storage  and  Issue  Records. 

The  establishment  of  a  proper  stores  control  is  to  be  reckoned  among 
the  most  important  achievements  of  the  past  two  years  and  a  half. 

The  storerooms  have  records  showing 

What  goods  were  received,  and 

From  whom  received. 

What  goods  were  issued  and 

To  whom  issued;  also 

The  amount  of  stock  on  hand. 

The  reports  of  goods  received  and  issued  from  storehouses  sent 
daily  to  the  central  office,  together  with  duplicates  of  all  invoices, 
requisitions  on  stores,  transfers,  loans,  and  so  forth,  make  possible  a 
system  of  accounting  where  the  control  ledgers  at  headquarters  can  exer- 
cise the  most  perfect  check  on  the  accounts  kept  at  the  storehouses. 

The  present  system  insures  the  Auditor  of  the  fact  that  all  bills 
presented  to  him  for  payment  are  only  for  goods  actually  delivered, 
inspected  and  passed. 

Finally,  the  present  records  show,  day  by  day,  the  quantity  and 
value  of  all  stores  under  the  charge  of  the  Bureau  of  Supplies. 

92 


Statistics. 

The  activities  of  the  Bureau  have  been  chartered  and  are  being 
investigated  by  the  aid  of  diagrams.  Matters  of  organization,  lines  of 
responsibility  and  the  various  steps  necessary  to  transact  the  business  of 
the  Bureau  are  made  clear  and  easily  understandable  by  means  of  draw- 
ings. It  is  truly  remarkable  the  way  complicated  masses  of  figures  take 
shape  and  assume  their  true  significance  when  plotted  to  scale.  Examples 
of  this  work  are  to  be  found  in  the  many  plates  illustrating  the  text  of 
the  previous  chapters. 


ANALYSIS  OF  ANNUAL  TRANSPORTATION  EXPENSES. 
1912  Total,  $107,495.68. 


93 


•  /2  £•*•"«'•   -    - 
M:£ 


Elihu  Cunyngham  Church  was  born  in  New  York  City  on  19th 
August,  1881.  He  successfully  completed  the  four-year  course  at  the 
Horace  Mann  ,High  School,  entering  Columbia  University  the  follow- 
ing year,  where  he  was  graduated  with  the  degree  of  Civil  Engineer 
(C.  E.)  in  1904.  The  next  three  years  were  spent  in  engineering  work. 
In  the  Fall  of  1907  he  returned  to  the  University  as  "  Assistant "  in 
Civil  Engineering.  The  following  Spring  he  was  appointed  "  Lec- 
turer "  in  Civil  Engineering — a  position  which  he  held  for  two  years. 
Since  then  he  has  been  Secretary  of  the  Department  of  Water  Supply, 
Gas  and  Electricity,  New  York  City. 

He  has  been  in  complete  charge  of  the  installation  and  administra- 
tion of  a  Central  Bureau  of  Supplies,  and  has  directed  and  had  per- 
sonal charge  of  the  letting  of  all  contracts,  and  the  purchasing,  storing 
and  issuing  of  all  material-  used  by  the  Department  (approximate 
annual  expenditure  supervised  is  fifteen  million  dollars).  He  has 
standardized  specifications,  introduced  new  methods  of  accounting  and 
stores  control,  built,  equipped  and  operated  large  central  distributing 
storerooms,  and  has  developed  and  systematized  a  branch  of  work  pre- 
viously done  in  a  haphazard  manner  or  left  to  chance. 

He  has  lectured  on  the  subject  before  many  technical  societies, 
including  The  Efficiency  Society,  The  American  Water  Works  Asso- 
ciation, The  New  England  Water  Works  Association,  and  the  students 
in  Engineering  at  Columbia  University.  Articles  concerning  his  work 
have  been  published  in  all  the  leading  engineering  papers  in  the 
country. 

Mr.  Church  received  the  degree  of  Master  of  Arts  (A.  M.)  from 
Columbia  University  in  1909. 


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